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                       SECURITIES AND EXCHANGE COMMISSION


                             WASHINGTON, D.C. 20549
                             ----------------------



                                    FORM 10-Q



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



For the Quarter ended:  June 30, 1999          Commission File Number  000-21685



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

DELAWARE                                                              54-1820617
(State of incorporation)                 (I.R.S. Employer Identification Number)

             11600 Sunrise Valley Drive, Suite 100, Reston, VA 20191
                    (Address of Principal Executive Offices)
                                 (703) 259-3000
                         (Registrant's telephone number)



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

The number of shares of the  registrant's  Common Stock  outstanding on June 30,
1999 was 32,968,404


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<PAGE>

                       INTELIDATA TECHNOLOGIES CORPORATION

                          QUARTERLY REPORT ON FORM 10-Q

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----
PART I - FINANCIAL INFORMATION

         Item 1.  Unaudited Condensed Consolidated Financial Statements

                  Condensed Consolidated Balance Sheets
                  June 30, 1999 and December 31, 1998 .........................3

                  Condensed Consolidated Statements of Operations
                  Three Months and Six Months Ended June 30, 1999 and 1998 ....4

                  Condensed Consolidated Statement of Changes in
                  Stockholders' Equity
                  Six Months Ended June 30, 1999...............................5

                  Condensed Consolidated Statements of Cash Flows
                  Six Months Ended June 30, 1999 and 1998......................6

                  Notes to Condensed Consolidated Financial Statements ........7

         Item 2.  Management's Discussion and Analysis of Financial Condition
                  and Results of Operations ...................................9


PART II - OTHER INFORMATION

         Item 6.  Exhibits and Reports on Form 8-K............................18


SIGNATURES        ............................................................19

<PAGE>

PART I:  FINANCIAL INFORMATION
------------------------------

ITEM 1:  FINANCIAL STATEMENTS
-----------------------------

                       INTELIDATA TECHNOLOGIES CORPORATION
                 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
                       JUNE 30, 1999 AND DECEMBER 31, 1998
                        (in thousands, except share data)

<TABLE>
                                                                                        1999            1998
                                                                                    ------------    ------------
<S>                                                                                 <C>             <C>
ASSETS
  CURRENT ASSETS
     Cash and cash equivalents                                                      $      7,066    $      8,050
     Accounts receivable, net of allowances of $888
         in 1999 and $592 in 1998                                                          1,489           2,113
     Prepaid expenses and other current assets                                                48             143
                                                                                    ------------    ------------
         Total current assets                                                              8,603          10,306

  NONCURRENT ASSETS
     Property and equipment, net                                                             194             348
     Other assets                                                                            175             257
                                                                                    ------------    ------------

TOTAL ASSETS                                                                        $      8,972    $     10,911
                                                                                    ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY
  CURRENT LIABILITIES
     Accounts payable                                                               $      1,794    $      1,344
     Accrued expenses and other liabilities                                                  805             910
     Deferred revenues                                                                     1,585           3,056
     Net liabilities of discontinued operations                                            3,484           5,270
                                                                                    ------------    ------------
         Total current liabilities                                                         7,668          10,580

  NONCURRENT LIABILITIES
     Deferred revenues                                                                         -               -
                                                                                    ------------    ------------
TOTAL LIABILITIES                                                                          7,668          10,580

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
     Preferred stock, $0.001 par value; authorized 5,000,000 shares;
         no shares issued and outstanding                                                      -               -
     Common stock, $0.001 par value; authorized 60,000,000 shares;
         issued 33,649,904 shares in 1999 and 32,293,005, shares in 1998;
         outstanding 32,968,404 shares in 1999 and 31,611,505 in 1998                         33              32
     Additional paid-in capital                                                          249,703         247,359
     Treasury stock, at cost                                                              (2,064)         (2,064)
     Deferred compensation                                                                  (217)           (152)
     Accumulated deficit                                                                (246,151)       (244,844)
                                                                                    ------------    ------------
TOTAL STOCKHOLDERS' EQUITY                                                                 1,304             331
                                                                                    ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                          $      8,972    $     10,911
                                                                                    ============    ============
</TABLE>

     See accompanying notes to condensed consolidated financial statements.

<PAGE>

                       INTELIDATA TECHNOLOGIES CORPORATION
            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                THREE AND SIX MONTHS ENDED JUNE 30, 1999 AND 1998
                (in thousands, except per share data; unaudited)

<TABLE>
                                                               Three months ended                  Six months ended
                                                                    June 30,                           June 30,
                                                          ----------------------------       ----------------------------
                                                             1999             1998              1999             1998
                                                          -----------      -----------       -----------      -----------
<S>                                                       <C>              <C>               <C>              <C>
REVENUES
     Software                                             $     368        $       -         $     530        $       -
     Consulting and services                                    777               63               966              211
     Leasing and other                                        1,658            2,088             3,431            4,411
                                                          -----------      -----------       -----------      -----------
         Total revenues                                       2,803            2,151             4,927            4,622
                                                          -----------      -----------       -----------      -----------

COST OF REVENUES
     Software                                                    37                -                53                -
     Consulting and services                                    260               25               301               34
     Leasing and other                                          318              524               698            1,229
                                                          -----------      ----------        -----------      ----------
         Total cost of revenues                                 615              549             1,052            1,263
                                                          -----------      -----------       -----------      -----------

GROSS PROFIT                                                  2,188            1,602             3,875            3,359

OPERATING EXPENSES
     General and administrative                               2,155            1,840             3,796            3,275
     Selling and marketing                                      504              645             1,212            1,287
     Research and development                                   698              716             1,603            1,357
                                                          -----------      -----------       -----------      -----------
         Total operating expenses                             3,357            3,201             6,611            5,919
                                                          -----------      -----------       -----------      -----------

OPERATING LOSS                                               (1,169)          (1,599)           (2,736)          (2,560)
                                                          -----------      -----------       -----------      -----------

OTHER INCOME                                                     77              550               120              686
                                                          -----------      -----------       -----------      -----------
LOSS BEFORE INCOME TAXES                                     (1,092)          (1,049)           (2,616)          (1,874)
INCOME TAXES                                                     --               --                --               --
                                                          -----------      -----------       -----------      -----------
LOSS FROM CONTINUING OPERATIONS                              (1,092)          (1,049)           (2,616)          (1,874)

DISCONTINUED OPERATIONS
  Gain (loss) from operation of telecommunications and
    interactive service divisions (net of income taxes)       1,309          (13,487)            1,309          (16,724)
  Gain (loss) on disposal of telecommunications and
    interactive service divisions                                 -           (8,233)                -           (8,993)
                                                          -----------      -----------       -----------      -----------
         Income (loss) from discontinued operations           1,309          (21,720)            1,309          (25,717)
                                                          -----------      -----------       -----------      -----------
NET INCOME (LOSS)                                         $     217        $ (22,769)        $  (1,307)       $ (27,591)
                                                          ===========      ===========       ===========      ===========

Basic and diluted income (loss) from continuing
  operations per common share                             $   (0.03)       $   (0.03)        $   (0.08)       $   (0.06)
                                                          ===========      ===========       ===========      ===========
Basic and diluted income (loss) from discontinued
  operations per common share                             $    0.04        $   (0.70)        $    0.04        $   (0.82)
                                                          ===========      ===========       ===========      ===========
Basic and diluted income (loss) per common share          $    0.01        $   (0.73)        $   (0.04)       $   (0.88)
                                                          ===========      ===========       ===========      ===========
Basic and diluted weighted average outstanding shares        32,627           31,374            32,160           31,273
                                                          ===========      ===========       ===========      ===========

</TABLE>
     See accompanying notes to condensed consolidated financial statements.

<PAGE>

                       INTELIDATA TECHNOLOGIES CORPORATION
       CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                         SIX MONTHS ENDED JUNE 30, 1999
                            (in thousands; unaudited)



<TABLE>
                                      Common stock     Additional
                                    ----------------   Paid-in       Treasury     Deferred     Accumulated   Comprehensive
                                    Shares    Amount   Capital        Stock     Compensation     Deficit         Loss        Total
                                    ------------------------------------------------------------------------------------------------
<S>                                 <C>       <C>      <C>          <C>         <C>            <C>           <C>            <C>
Balance at December 31, 1998        31,612    $   32   $  247,359   $  (2,064)   $    (152)    $ (244,844)      $      -    $   331
  Issuance of common stock:              -         -            -           -            -              -              -          -
     Exercise of stock options       1,108         1        1,866           -            -              -              -      1,867
  Issuance of restricted stock         269         -          347           -         (103)             -              -        244
  Issuance of stock warrants             -         -          141           -         (141)             -              -          -
  Cancellation of restricted stock     (22)        -          (10)          -           10              -              -          -
  Compensation expense                   -         -            -           -          169              -              -        169
  Net loss                               -         -            -           -            -         (1,307)        (1,307)    (1,307)
                                    ------------------------------------------------------------------------------------------------
Balance at June 30, 1999            32,967    $   33   $  249,703   $  (2,064)   $    (217)    $ (246,151)      $ (1,307)   $ 1,304
                                    ================================================================================================

</TABLE>


     See accompanying notes to condensed consolidated financial statements.

<PAGE>

                       INTELIDATA TECHNOLOGIES CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                     SIX MONTHS ENDED JUNE 30, 1999 AND 1998
                            (in thousands; unaudited)

<TABLE>
                                                                             1999                   1998
                                                                          -----------            -----------
<S>                                                                       <C>                    <C>
Cash flows from operating activities of continuing operations
Loss from continuing operations                                           $    (2,616)           $    (1,874)
Adjustments to reconcile loss from continuing operations
to net cash used in operating activities for continuing operations:
   Depreciation and amortization                                                  154                    413
   Provision for losses on accounts receivable                                    296                      -
   Deferred compensation and other noncash items                                  169                   (105)
   Changes in certain assets and liabilities:
       Accounts receivable                                                        328                    235
       Inventories                                                                  -                    (22)
       Prepaid expenses and other current assets                                   95                     14
       Other assets                                                                82                    141
       Accounts payable                                                           450                   (289)
       Accrued expenses and other liabilities                                    (105)                  (226)
       Deferred revenues                                                       (1,471)                (1,330)
                                                                          -----------            -----------
            Net cash used in operating activities
            for continuing operations                                          (2,618)                (3,043)
                                                                          -----------            -----------

   Net gain from discontinued operations                                        1,309                      -
   Change in net liability in discontinued operations                          (1,786)                     -
                                                                          -----------            -----------
            Net cash provided by (used in) operating activities
            for discontinued operations                                          (477)                 1,301
                                                                          -----------            -----------

Net cash provided by (used in) operating activities                            (3,095)                (1,742)

Cash flows from investing activities
   Proceeds from the sale of short-term investments                                -                   9,304
   Purchases of property and equipment-continuing operations                       -                      (7)
                                                                          -----------            -----------
               Net cash provided by investing activities                           -                   9,297
                                                                          -----------            -----------

Cash flows used in financing activities
   Payment of short-term borrowings-discontinued operations                        -                  (1,500)
   Proceeds from the issuance of common stock                                   2,111                    294
                                                                          -----------            -----------
              Net cash provided by (used in) financing activities               2,111                 (1,206)
                                                                          -----------            -----------

             Increase (decrease) in cash and cash equivalents                    (984)                 6,349

Cash and cash equivalents at beginning of period                                8,050                  2,055
                                                                          -----------            -----------

Cash and cash equivalents at end of period                                $     7,066            $     8,404
                                                                          ===========            ===========
</TABLE>

     See accompanying notes to condensed consolidated financial statements.

<PAGE>

                       INTELIDATA TECHNOLOGIES CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                THREE AND SIX MONTHS ENDED JUNE 30, 1999 AND 1998
                                   (Unaudited)


(1)      Basis of Presentation

                  The  condensed   consolidated   balance  sheet  of  InteliData
         Technologies  Corporation  ("InteliData"  or  "Company") as of June 30,
         1999, and the related condensed  consolidated  statements of operations
         for the three and six month  periods  ended June 30,  1999 and 1998 and
         condensed  consolidated  statements  of cash  flows  for the six  month
         periods  ended June 30, 1999 and 1998  presented  in this Form 10-Q are
         unaudited. In the opinion of management,  all adjustments necessary for
         a fair  presentation  of such financial  statements have been included.
         Such  adjustments  consist  only of  normal  recurring  items.  Interim
         results  are not  necessarily  indicative  of results  for a full year.
         Certain amounts for previous periods have been  reclassified to conform
         to the current period presentation.

                  The condensed  consolidated financial statements and notes are
         presented  as  required  by  Form  10-Q,  and  do not  contain  certain
         information   included  in  the  Company's  annual  audited   financial
         statements  and notes.  These  financial  statements  should be read in
         conjunction with the annual audited financial statements of the Company
         and the  notes  thereto,  together  with  management's  discussion  and
         analysis of financial condition and results of operations, contained in
         the Form 10-K for the fiscal year ended December 31, 1998.


(2)      Segment Reporting

                  The  company's  continuing  operations  are  reported  in  two
         operating  segments:  Internet  Banking  and  Leasing.  The  basis  for
         determining  the  Company's  operating  segments is the manner in which
         financial   information   is  used  by  the  Company  in  managing  its
         operations. Management organizes and operates the business according to
         units which  provide  unique  products and services.  Operating  (loss)
         income in these two segments  represents  total revenues less operating
         expenses,  and  excludes  other  income and expense  and income  taxes.
         Segment financial information is as follows (in thousands):

<PAGE>

      ------------------------------------------------------------------------
                                     Internet Banking   Leasing   Consolidated
      ------------------------------------------------------------------------
      1999 Second Quarter
          Revenues                   $         1,811    $   992   $     2,803
          Operating (loss) income             (1,843)       674        (1,169)


      1998 Second Quarter
          Revenues                   $           766    $ 1,385   $     2,151
          Operating (loss) income             (2,460)       861        (1,599)

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


      ------------------------------------------------------------------------
                                     Internet Banking   Leasing   Consolidated
      ------------------------------------------------------------------------
      1999 Six Months
          Revenues                   $         2,845    $ 2,082   $     4,927
          Operating (loss) income             (3,787)     1,054        (2,733)


      1998 Six Months
          Revenues                   $         1,539    $ 3,083   $     4,622
          Operating (loss) income             (4,414)     1,854        (2,560)

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


(3)      Subsequent Events

                  On July 22, 1999,  the Company  closed a private  placement of
         600  shares  of 4%  Convertible  Preferred  Stock,  $.001 par value per
         share, for an aggregate  purchase price of approximately  $6.0 million.
         The financing was offered and sold solely to accredited investors.  The
         Company  intends  to use the  proceeds  of the  financing  for  general
         working capital purposes.

                  On July 27, 1999, the Company received notification  regarding
         possible changes to the billing process for the US West Caller ID Lease
         Base. The pending  changes could have a substantial  effect on the rate
         of decline of the lease base,  the cost of billing,  and the  Company's
         ability  to  pursue  collections.  Any and all of these  changes  could
         negatively effect the Company's revenue, cost of sales and gross margin
         in future periods.

<PAGE>

ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
----------------------------------------------------------
         CONDITION AND RESULTS OF OPERATIONS
         -----------------------------------


Results of Operations
---------------------

         The  following  represents  the results of  operations  for  InteliData
Technologies  Corporation  for the three and six months  ended June 30, 1999 and
1998. Such information  should be read in conjunction with the interim financial
statements and the notes thereto in Part I, Item 1 of this Quarterly Report.

THREE MONTHS ENDED JUNE 30, 1999 AND 1998

Revenues

         The Company's  second quarter revenues were $2,803,000 in 1999 compared
to  $2,151,000  in  1998,  an  increase  of 30% or  $652,000.  The  increase  is
attributed  primarily  to  the  increase  in  software  sales  and  professional
services,  offset by the  expected  decrease in the  billable  Caller ID leases.
During the second quarter,  software revenues contributed  $368,000,  consulting
and services  revenues  contributed  $777,000,  and other  revenues  contributed
$1,658,000.  Software and consulting revenue were the result of progress on bank
installations at Mid-Atlantic  Federal Credit Union,  Summit Bank, BB&T, Compass
Bank and US Trust.  At the end of the period  the BB&T and Summit  installations
had been completed.

         During  the same  period  in 1998,  there  were no  software  revenues,
consulting  and  services  contributed  $63,000 and other  revenues  contributed
$2,088,000.  During the second quarter of 1999,  revenues from leasing and other
operations  consisted  of  $992,000  from  customers  within  its lease base and
$666,000 from royalties  relating to the Visa Bill-Pay  system.  During the same
period in 1998, the Company  recognized  $1,385,000  from  customers  within its
lease base,  $625,000  from monthly  service fees for bill pay  operations,  and
$78,000 in revenues from maintenance contracts related to the sale of software.

Cost of Revenues

         The  Company's  second  quarter cost of revenues  were $615,000 in 1999
compared  to $549,000 in 1998,  an increase of 12% or $66,000.  The  increase is
attributed  primarily  to the  increase in revenue over the same period in 1998,
offset by the expected  decreasing  revenue  from Caller ID leasing  activities.
During  the  second  quarter  of 1999,  software  cost of  revenues  contributed
$37,000, consulting and services contributed $260,000 and other cost of revenues
contributed  $318,000.  Other cost of revenues consisted of expenses  associated
with leasing activities.

         During the  second  quarter of 1998,  there  were no  software  cost of
revenues, consulting and services contributed $25,000 and other cost of revenues
contributed  $524,000.  Other cost of revenues consisted of expenses  associated
with leasing activities.
<PAGE>

         Overall gross profit margins increased to 78% for the second quarter of
1999 from 75% for the  second  quarter of 1998.  The  increase  in gross  profit
margins was  attributed  primarily to the lack of  depreciation  expense for the
leasing  activities in the second  quarter of 1999.  The lease base became fully
depreciated  in 1998.  The Company  anticipates  that gross  profit  margins may
fluctuate  in the  future  due to  changes  in  product  mix  and  distribution,
outsourcing   activities  associated  with  a  service  bureau  business  model,
competitive  pricing  pressure,  the introduction of new products and changes in
the volume, terms, and billing costs of leasing activity.

General and Administrative

         General and  administrative  expenses  were  $2,155,000  for the second
quarter of 1999 as compared to  $1,840,000  in the second  quarter of 1998.  The
increase of $315,000 was primarily  the result of a non-cash  charge of $244,000
associated  with certain  stock grants and  additional  expense  incurred as the
result of investment banking services,  legal and due diligence costs associated
with the  negotiations  surrounding  the  proposed  merger  with Home  Financial
Network,  Inc.,  which  negotiations  were halted in favor of establishment of a
joint marketing arrangement.

Selling and Marketing

         Selling and  marketing  expenses  decreased  to $504,000 for the second
quarter of 1999 from  $645,000 for the same period last year.  The  reduction is
attributed  primarily to decreases  in the number of  marketing  employees,  the
level of  newspaper  and other print  advertising,  and the  reduction  of other
outside consulting expenses.

Research and Development

         Research and  development  costs were $698,000 in the second quarter of
1999,  as  compared to  $716,000  in the same  period in 1998.  The  decrease is
largely  attributable  to the increase in certain  employees  billable  hours on
customer  projects  which are  reflected  within  cost of  revenue.  The Company
primarily  invests  research and development  expenses in writing and developing
the  Interpose  Transaction  Engine  for the  Open  Financial  Exchange  ("OFX")
standard,  and has  begun  the  initial  development  work  associated  with the
company's service bureau business.

Other Income

         Other income,  primarily  investment income, was $77,000 for the second
quarter of 1999 compared to $550,000 for the same period in the prior year.  The
decrease of $473,000  was  attributed  to the  previous  year's  recognition  of
realized gains in the Company's investment portfolio.
<PAGE>

Discontinued Operations

         Discontinued operations for the Company consists of business activities
of the telecommunications  and interactive services divisions.  During 1998, the
Company  recorded  liabilities  to account for the  operations and activities of
discontinued operations. During the second quarter of 1999, the Company realized
a gain of $1,309,000 from the operations of the discontinued business, primarily
attributable to favorable  settlements with former  telecommunication  customers
and  retailers  and the  success of  aggressive  collection  efforts  related to
accounts receivable from customers of the discontinued  business. For the second
quarter of 1998, the loss from  operations of  discontinued  operations  (net of
income taxes) was  $13,487,000  and the loss from  disposal of the  discontinued
operations was $8,233,000.

Weighted Average Outstanding Shares and Basic and Diluted Loss Per Common Share

         The basic and diluted  weighted  average shares increased to 32,627,000
for the second  quarter of 1999 compared to 31,693,000 for the second quarter of
1998. The increase resulted primarily from the exercise of stock options and the
granting of certain stock awards during the second quarter of 1999.

         As a result of the  foregoing,  basic and diluted loss per common share
from  continuing  operations was $(0.03) for the second quarter of 1999 compared
to a loss of $(0.03) for the second  quarter of 1998.  Basic and diluted  income
from  discontinued  operations  per  common  share was $0.04  during  the second
quarter of 1999,  as  compared to a loss of $(0.70) for the same period in 1998.
Basic and diluted  income per common  share was $0.01 for the second  quarter of
1999 compared to a loss of $(0.73) for the second quarter of 1998.

SIX MONTHS ENDED JUNE 30, 1999 AND 1998

Revenues

         The Company's revenues for the first six months of 1999 were $4,927,000
compared to  $4,622,000  in 1998,  an increase  of 7% or  $305,000.  The Company
recognized  $530,000  in software  revenue  during the first six months of 1999.
During  the  same  period  in 1998,  the  Company  did not  sell  any  software.
Consulting and services revenues  aggregated $966,000 in the first six months of
1999 while during the same period in 1998,  the Company  recognized  $211,000 in
consulting and services. Leasing and other revenues were $3,431,000 in the first
six  months of 1999  compared  to  $4,411,000  in the first six  months of 1998.
During the first six months of 1999,  revenues from leasing and other operations
consisted of $2,082,000  from  customers  within its lease base,  and $1,349,000
from  royalty  revenues  related to the VISA  Bill-Pay  system.  During the same
period in 1998, the Company  recognized  $3,083,000  from  customers  within its
lease base,  $78,000 in revenues from maintenance  contracts related to the sale
of software,  and $1,250,000 from royalties related to the VISA Bill-Pay system.
The number of active records in the Company's  installed lease base historically
decreases at a rate of 27% per year. The Company expects this trend to continue.
<PAGE>

Cost of Revenues

         The  Company's  cost of revenues  for the first six months of 1999 were
$1,052,000  compared to $1,263,000  in 1998, a decrease of 20% or $211,000.  The
Company did not sell any  software  during the first six months of 1998 while in
the same period in 1999, the Company  incurred  $53,000 in costs associated with
software sales.  Consulting and services cost of revenues aggregated $301,000 in
the first six months of 1999,  while during the same period in 1998, the Company
aggregated  $34,000 in cost of revenues for  consulting  and  services.  Cost of
revenues  associated with leasing aggregated $698,000 in the first six months of
1999 compared to $1,229,000 in the same period of 1998.  The decrease in cost of
revenues for the  Company's  lease base from the first half of 1998 to the first
half  of  1999  was  attributed  primarily  to the  lease  base  becoming  fully
depreciated  in 1998 and an  expected  decrease  in the  number of active  lease
customers.

         Overall gross profit margins  increased to 79% for the first six months
of 1999 from 73% for the same period in 1998. The large increase in gross profit
margins was  attributed  primarily  to a shift in the source of revenues for the
Company and the effects of the Company's  lease base becoming fully  depreciated
of the Company's lease base. The Company  anticipates  that gross profit margins
may fluctuate in the future due to changes in product mix,  competitive  pricing
pressure, the introduction of new products and changes in the volume, terms, and
billing costs of leasing activity.

General and Administrative

         General and  administrative  expenses were $3,796,000 for the first six
months of 1999 as compared to  $3,275,000  in the first six months of 1998.  The
increase of $518,000 was  attributed  to  expanding  the  Company's  development
facilities in Toledo,  Ohio,  expenses associated with the move of the Company's
headquarters to Reston, Virginia, non-cash charges associated with certain stock
grants, and expenses  associated with the due diligence  performed in connection
with the potential  merger and joint marketing  arrangement  with Home Financial
Network,  Inc..  Throughout the year, the Company expects to control general and
administrative  expenses  and plans to  continually  assess  its  operations  in
managing the  continued  development  of  infrastructure  to handle  anticipated
business levels.  The Company expects to increase the level of contract activity
thereby reducing the percentage of employee time allocated to corporate  general
and administrative activities.

Selling and Marketing

         Selling and marketing  expenses  decreased to $1,212,000  for the first
six months of 1999 from  $1,287,000  for the same period last year. The decrease
is primarily  attributable  to the lower headcount in the marketing  areas,  and
lower expenses associated with advertising and trade shows.

<PAGE>

Research and Development

         Research and development  costs were $1,603,000 in the first six months
of 1999  compared to  $1,357,000  for the same period in 1998.  The  increase of
$246,000 was largely  attributable to increases in employee  expenses during the
first  three  months  of the  year,  as well  as  outside  consulting  services,
expansion  of the  company's  development  facility  in Ohio and  noncapitalized
equipment  purchases.  The Company  primarily  invests  research and development
expenses in writing and developing the Interpose Transaction Engine for the Open
Financial Exchange ("OFX") standard,  and has begun the initial development work
associated with the company's service bureau business.

Other Income

         Other income,  primarily  investment income, was $120,000 for the first
six months of 1999  compared to $686,000  for the same period in the prior year.
The decrease of $566,000 was attributed to decreased cash, cash  equivalents and
short-term  investment  balances in the first half of 1999 compared to the first
half of 1998  and a  realization  of a large  gain in the  company's  investment
portfolio  during 1998. The decrease in cash,  cash  equivalents  and short-term
investment balances were related to the funding of the Company's working capital
and  operating  losses,  partially  offset by the effects of favorable  customer
settlements and improved collections in discontinued operations..

Discontinued Operations

         Discontinued operations for the Company consists of business activities
of the telecommunications  and interactive services divisions.  During 1998, the
Company  recorded  liabilities  to account for the  operations and activities of
discontinued  operations.  During  the first six  months  of 1999,  the  Company
realized a gain of $1,309,000 from the operations of the discontinued  business,
primarily from favorable settlements with former telecommunication customers and
retailers,  and the success of aggressive collection efforts related to accounts
receivable from customers of the discontinued business. For the first six months
of 1998,  the loss  from  discontinued  operations  (net of  income  taxes)  was
$16,724,000  and the loss  from  disposal  of the  discontinued  operations  was
$8,993,000.

Weighted Average Outstanding Shares and Basic and Diluted Loss Per Common Share

         The basic and diluted  weighted  average shares increased to 32,160,000
for the first half of 1999  compared to  31,273,000  for the first half of 1998.
The  increase  in shares is  primarily  attributable  to the  exercise  of stock
options and stock grants to key employees.  As a result of the foregoing,  basic
and diluted loss per common share from continuing operations was $(0.08) for the
first half of 1999  compared  to $(0.06)  for the first half of 1998;  basic and
diluted income per common share from  discontinued  operations was $0.04 for the
first half of 1999  compared  to a loss of  $(0.82)  for the first half of 1998;
basic and diluted  loss per common  share was $(0.04) for the first half of 1999
compared to $(0.88) for the first half of 1998.
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

         During  the  first  six  months  of  1999,  the  Company's  cash,  cash
equivalents and short-term  investments decreased by $984,000. At June 30, 1999,
the Company had $7,066,000 in cash and cash  equivalents.  At June 30, 1999, the
Company had working  capital of $935,000 with no long-term  debt.  The Company's
total assets exceeded total liabilities by $1,304,000.

         During  the first  six  months of 1999,  cash used in  activities  from
continuing  operations was $2,618,000  compared to $3,043,000 in the same period
in 1998. Cash used in operating  activities of continuing  operations during the
first six months of 1999 reflects  operating  losses  arising from certain fixed
costs and the  declining  level of  advanced  payments  by  customers  (deferred
revenues),  offset in part by net cash  generated  from  increases  in  accounts
payable and reductions in prepaid expenses.

         Cash used in activities of continuing  operations during the first half
of 1998 were primarily related to funding payments of trade payables and accrued
expenses,  and the declining level of advanced payments by customers,  offset in
part by  decreases  in  prepaid  expenses  and  other  assets.  Cash  used  from
discontinued  operations  during  the  first  six  months  of 1999 was  $477,000
resulting   primarily  from  payments   related  to  severance   agreements  and
settlements   with  customers,   partially   offset  by  cash  collections  from
telecommunications customers.

         The Company had no investing  activities during the first six months of
1999. Cash provided by investing  activities in 1998 was primarily the result of
the sale of short-term investments.

         Financing  activities  provided  $2,111,000  in the first  half of 1999
compared  to the use of  $1,206,000  during  the first  half of 1998.  Financing
activities in the first six months of 1999 consisted  primarily of proceeds from
the sale of the Company's common stock through stock option exercises. Financing
activities  in the first half of 1998  consisted of the  repayment of short-term
borrowings,  partially  offset by proceeds from the sale of the Company's common
stock through stock option exercises.

         The Company's  continuation  as a going  concern is dependent  upon its
ability to generate  sufficient  cash flows to meet its  obligations on a timely
basis, to obtain additional  financing,  and ultimately to attain profitability.
To that extent,  on July 22, 1999, the Company closed a private placement of 600
shares  of 4%  Convertible  Preferred  stock,  $.001  par value per share for an
aggregate purchase price of approximately $6.0 million.

         In addition,  the Company's  accuracy in  predicting  revenues and cash
flow is limited in that the sale of the Company's core product is reliant on the
banking industry's willingness to invest in a new market, internet banking. This
market  segment is slowly  evolving  and is subject to a number of  variables in
1999 that will  determine  the timing and quantity of new sales that the Company
is able to achieve.  Such variables include: (1) the effect of consolidations in
the  banking  industry;  (2)  financial  institutions'  progress  on  Year  2000
compliance;  and (3) the banking  customers'  willingness to invest freely in an
untested customer channel.

<PAGE>

         The Company received  notification from the Nasdaq Stock Market that it
intended to delist the  Company's  common  stock from the Nasdaq  Stock  Market,
effective  May 4,  1999,  due to the  Company's  failure  to meet  Nasdaq's  net
tangible  asset  requirement  of $4 million.  InteliData  has appealed  Nasdaq's
decision in  accordance  with  Nasdaq  procedures,  initially  by  requesting  a
hearing. Such a hearing was held on July 1, 1999 and to date, no action has been
taken to  delist  the  Company.  InteliData  has taken  steps to remedy  its net
tangible asset deficiency and on July 22, 1999,  secured a private  placement of
approximately  $6.0  million  of  Convertible  Preferred  Stock in an  effort to
maintain its Nasdaq listing. InteliData believes that its current financing will
permit  the  Company  to comply  with  Nasdaq's  listing  requirements.  Until a
decision is made by Nasdaq's Listings Hearings Department,  the Company's common
stock will remain  listed on Nasdaq.  If  InteliData  is not  successful  in its
appeal,  its common stock will continue to trade on the over the counter  market
or on another  appropriate  trading  exchange or market.  The decision by Nasdaq
will have no effect on the Company's day-to-day business operations.

YEAR 2000 UPDATE

General
-------

         The  inability of  computers,  software and other  equipment  utilizing
microprocessors  to recognize  and properly  process data fields  containing a 2
digit year is commonly  referred to as the Year 2000  Compliance  issue.  As the
year 2000 approaches,  such systems may be unable to accurately  process certain
date-based information.

         The Company  believes it has  identified all  significant  applications
that will  require  modification  to ensure Year 2000  Compliance.  Internal and
external  resources are being used to make the required  modifications  and test
Year 2000 Compliance.

Project
-------

         The Company's Year 2000 Project ("Project") is generally  proceeding on
schedule.  In  1996,  the  Company  began a  significant  re-engineering  of its
business  processes  across the Company  including  improved  access to business
information  through common,  integrated  computing  systems.  As a result,  the
Company  replaced its business systems with systems from J.D. Edwards & Company,
IBM  Corporation and Microsoft  Corporation,  which are designed to be Year 2000
Compliant. The Company became fully operational on these systems in 1998.

         The Company has a Project  team,  with  certain sub teams.  The Project
includes four major areas corporate  business  systems,  local software systems,
third party suppliers of goods and services, and Interpose software systems. The
general  phases of the Project  are:  (1)  inventorying  date-aware  items;  (2)
determining  criticality  and  assigning  priorities to  identified  items;  (3)
assessing  the Year 2000  compliance  of items  determined to be material to the
Company; (4) repairing,  replacing or identifying workarounds for material items
that are determined not to be

<PAGE>

Year 2000 Compliant;  (5) testing material items; (6) identifying critical third
parties; and (7) designing contingency plans.

         At  September  30,  1998,  the  inventory,   priority   assessment  and
compliance  assessment  phases  of each  area of the  Project  were  essentially
complete.  Material  items  are those  believed  by the  Company  to have a risk
involving the welfare of our customers or substantially affect revenues.

         Corporate  business  systems  proceeding  on schedule or complete as of
March  31,  1999   include   hardware   and  systems   software,   networks  and
telecommunications. All corporate systems activities are expected to be complete
by September, 1999.

         Local software  systems  include  process  control and  instrumentation
systems and building systems.  Operational improvement projects already underway
address  some of the Year  2000  concerns.  Some  manufacturer  replacements  or
upgrades  are  behind  schedule;   however,   the  Company  estimates  necessary
replacements or upgrades will be completed by September, 1999.

         The third party suppliers phase includes the process of identifying and
prioritizing  critical  suppliers of goods and services,  and communicating with
them about their plans and progress in addressing  the Year 2000  concerns.  The
Company completed the identification phase and evaluated the most critical third
parties. These evaluations were followed by the development of contingency plans
as  necessary,  including  plans to use  alternative  third  party  vendors,  if
necessary. This Project phase was completed by mid-1999, with monitoring planned
through the remainder of 1999.

         The   Company   has   contingency   plans  for  some   mission-critical
applications and is working on plans for others. For example,  contingency plans
for the  payroll  system  have been in place  since the second  quarter of 1998,
while detailed plans for other business processes will be completed by year-end.
A steering  committee is closely  monitoring  the  progress of business  process
contingency  plans  involving,  among  other  actions,  manual  workarounds  and
additional staffing.

         The Interpose  software phase included  actions to address the issue of
Year 2000  Compliance  as it relates to the  Company's  customer  software.  The
Company believes that its current version of the Interpose software is Year 2000
Compliant. Actions taken to address previous releases of the software were, with
minor exceptions, programming changes to replace a non-compliant date conversion
routine  with one that was  already  Year 2000  compliant.  Any  customer  whose
product was not already compliant was notified of any source code changes and/or
release  updates  made to the  product.  The Company  has issued  letters to its
customers  that assure that any changes  pertinent to the  correcting  Year 2000
concerns  were  addressed  by the  third  quarter  of 1997 and  that all  future
releases of Interpose will be fully year 2000 compliant.

<PAGE>

Costs
-----

         The estimated  total cost  associated  with required  modifications  to
become Year 2000 compliant has not been and is not anticipated to be material to
the Company's financial position or results of operations in any given year. The
estimated  total  cost  of the  Project  is or  will be  expensed  and  includes
allowances  for  some  items  for  which  a fix or  workaround  is  still  being
determined.

Risks
-----

         The failure to correct a material  Year 2000 problem could result in an
interruption in, or failure of certain normal business activities or operations,
which could materially and adversely affect the Company's results of operations,
liquidity and financial  condition.  Due to the general uncertainty  inherent in
the Year 2000 problem,  resulting in part from the  uncertainty of the Year 2000
readiness  of  third-party  suppliers  and  customers,  the Company is unable to
determine at this time whether the  consequences of Year 2000 problems will have
a material impact on the Company's results of operations, liquidity or financial
condition.  The Project is expected to reduce  significantly the Company's level
of uncertainty  about the Year 2000 problem and, in  particular,  about the Year
2000 compliance and readiness of its material third-party suppliers. The Company
believes that with the previously accomplished implementation of global business
systems and completion of the Project as scheduled,  the possibility of material
interruptions of normal operations should be reduced significantly.


CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995

         The  above  information  includes   forward-looking   statements,   the
realization  of which  may be  impacted  by the  factors  discussed  below.  The
forward-looking  statements  are made pursuant to the safe harbor  provisions of
the Private  Securities  Litigation Reform Act of 1995 (the "Act").  This report
contains forward looking statements that are subject to risks and uncertainties,
including,  but not limited to, successful  implementation of business strategy,
liquidity  and  capital  resources,  developing  internet  banking  marketplace,
fluctuations in operating  results,  reliance on Caller ID leasing  revenues and
billing  operations,  InteliData  common  stock  owned by  WorldCorp  and  World
Airways, technological considerations, competition, dependence on key employees,
volatility of stock price, the Company's  ability to continue its listing on the
Nasdaq National Market, limited proprietary protection, and other risks detailed
from time to time in the  Company's  filings  with the  Securities  and Exchange
Commission,  including the risk factors disclosed in the Company's Form 10-K for
the fiscal year ended  December 31, 1998.  These risks could cause the Company's
actual results for 1999 and beyond to differ  materially from those expressed in
any  forward  looking  statements  made by, or on behalf  of, the  Company.  The
foregoing  list of  factors  should not be  construed  as  exhaustive  or as any
admission regarding the adequacy of disclosures made by the Company prior to the
date hereof or the effectiveness of said Act.

<PAGE>

PART II: OTHER INFORMATION
--------------------------

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


(a)      Exhibits (* denotes filed herewith)
         --------

         * 10.15    General Release and Severance  Agreement dated June 23, 1999
                    between  InteliData  Technologies  Corporation  and  John C.
                    Backus, Jr.


(b)      Reports on Form 8-K
         -------------------

         The Company filed Current  Reports on Form 8-K with the  Securities and
         Exchange  Commission  on June 3, 1999 and July 26,  1999 (as amended on
         July 28, 1999).

<PAGE>
                                   SIGNATURES


         Pursuant  to the  requirements  of the  Securities  Act  of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.


                                 INTELIDATA TECHNOLOGIES CORPORATION



                                 By:   /s/ Alfred S. Dominick, Jr.
                                       ---------------------------
                                       Alfred S. Dominick, Jr.
                                       President and Chief Executive Officer and
                                       Acting Chief Financial Officer