FORM 10-Q

                     SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C.  20549


        [X]   Quarterly  Report Pursuant to Section
              13  or   15(d)   of  the   Securities
              Exchange Act of 1934


              For the quarterly period ended June 30, 1999

        [  ]  Transition Report Pursuant to Section 13 or 15(d) of the
              Securities Exchange Act of 1934

                        Commission file number 1-7265


                            AMBASE CORPORATION


           (Exact name of registrant as specified in its charter)



           Delaware                                 95-2962743

   (State of incorporation)            (I.R.S. Employer Identification No.)


                        51 WEAVER STREET, BUILDING 2
                      GREENWICH, CONNECTICUT 06831-5155

          (Address of principal executive offices)     (Zip Code)

                               (203) 532-2000

             (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.

YES     X        NO

At June 30, 1999,  there were 44,533,519  shares of  registrant's  common stock,
$0.01 par value per share, outstanding, excluding 126,488 treasury shares.
<PAGE>

AmBase Corporation

Quarterly Report on Form 10-Q
June 30, 1999

CROSS REFERENCE SHEET FOR
PARTS I and II                                                            Page
                                                                         ------

PART I - FINANCIAL INFORMATION

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

Item 2.      Management's Discussion and Analysis of
                   Financial Condition and Results of Operations..............7

Item 3.      Quantitative and Qualitative Disclosures
                   About Market Risk.........................................10

PART II - OTHER INFORMATION

Item 1.      Legal Proceedings...............................................11

Item 2.      Changes in Securities...........................................12

Item 3.      Defaults Upon Senior Securities.................................12

Item 4.      Submission of Matters to a Vote of Security Holders.............12

Item 5.      Other Information...............................................12

Item 6.      Exhibits and Reports on Form 8-K................................12

<PAGE>

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                     AMBASE CORPORATION AND SUBSIDIARIES
                    Consolidated Statements of Operations
                 Second Quarter and Six Months Ended June 30
                                (Unaudited)
                    (in thousands, except per share data)

<TABLE>
<CAPTION>
                                           Second Quarter            Six Months
                                           1999       1998         1999       1998
                                           ====       ====         ====       ====
<S>                                      <C>        <C>          <C>        <C>
Operating expenses:
Compensation and benefits............... $   817    $   444      $ 1,701    $   958
Professional and outside services.......   1,347        380        1,412        650
Insurance...............................      17         22           35         45
Occupancy...............................      28         22           51         43
Other operating.........................      36         12           84         55
                                          ------     ------       ------     ------
                                           2,245        880        3,283      1,751
                                          ------     ------       ------     ------
Operating loss..........................  (2,245)      (880)      (3,283)    (1,751)
                                          ------     ------       ------     ------
Interest income.........................     523        593        1,054      1,225
Other income............................      61          -          104          -
                                          ------     ------       ------     ------
Loss before income taxes................  (1,661)      (287)      (2,125)      (526)
Income tax expense......................     (68)       (64)        (123)      (128)
                                          ------     ------       ------     ------

Net loss................................ $(1,729)   $  (351)     $(2,248)   $  (654)
                                          ======     ======       ======     ======

Earnings per common share:
Net loss - basic........................ $ (0.04)   $ (0.01)     $ (0.05)   $ (0.02)
Net loss - assuming dilution............   (0.04)     (0.01)       (0.05)     (0.02)
                                          ======     ======       ======     ======

Average shares outstanding..............  44,534     44,534       44,534     44,534
                                          ======     ======       ======     ======
</TABLE>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
                                   -1-

<PAGE>

                    AMBASE CORPORATION AND SUBSIDIARIES
                        Consolidated Balance Sheets
                               (in thousands)

<TABLE>
<CAPTION>

                                                    June 30,       December 31,
                                                        1999               1998
                                                 (unaudited)
                                                  =========        ============
<S>                                               <C>              <C>
Assets
Cash and cash equivalents.....................   $     998          $     2,886
Investment securities - held to maturity
   (market value $46,625 and $47,160,
   respectively)..............................      46,647               47,156
Investment in SDG, Inc. at cost...............       1,250                1,250
Other assets..................................         506                  346
                                                  --------           ----------

Total assets..................................   $  49,401          $    51,638
                                                  ========           ==========
Liabilities and Stockholders' Equity
Liabilities:
Accounts payable and accrued liabilities......   $   1,533          $     1,642
Supplemental retirement plan..................       5,312                5,079
Postretirement welfare benefits...............       1,234                1,301
Other liabilities.............................         112                  152
Litigation and contingency reserves...........       2,070                2,076
Income tax reserves...........................      66,388               66,388
                                                  --------           ----------
Total liabilities.............................      76,649               76,638
                                                  --------           ----------
Commitments and contingencies.................           -                    -
                                                  --------           ----------
Stockholders' equity:
Common stock..................................         447                  447
Paid-in capital...............................     547,712              547,712
Accumulated deficit...........................    (574,760)            (572,512)
Treasury stock................................        (647)                (647)
                                                  --------           ----------
Total stockholders' equity....................     (27,248)             (25,000)
                                                  --------           ----------

Total liabilities and stockholders' equity....   $  49,401         $     51,638
                                                  ========           ==========
</TABLE>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
                                     -2-

<PAGE>

                      AMBASE CORPORATION AND SUBSIDIARIES
                     Consolidated Statements of Cash Flows
                            Six Months Ended June 30
                                 (in thousands)
<TABLE>
<CAPTION>

                                                        1999               1998
                                                        ====               ====
<S>                                                <C>                 <C>
Cash flows from operating activities:
Net loss.......................................    $  (2,248)          $   (654)
Adjustments to reconcile net loss to net
   cash used by operations:
Other assets........... .......................           73                 58
Accounts payable and accrued liabilities.......         (109)            (1,224)
Litigation and contingency reserves uses.......           (6)              (115)
Income tax reserves uses.......................            -            (12,700)
Other liabilities..............................          126                (24)
Amortization of discount - investment
   securities..................................       (1,043)            (1,170)
Other, net.....................................            7                 46
                                                    --------           --------
Net cash used by operating activities..........       (3,200)           (15,783)
                                                    --------           --------
Cash flows from investing activities:
Maturities of investment securities
   - held to maturity..........................       60,006             39,692
Purchases of investment securities
   - held to maturity..........................      (58,454)           (27,428)
Purchases of other investment securities.......         (250)                 -
Proceeds from Home Holdings, Inc. receivable...            -                  8
Other, net.....................................           10                 35
                                                    --------           --------
Net cash provided by investing activities......        1,312             12,307
                                                    --------           --------
Net decrease in cash and cash equivalents......       (1,888)            (3,476)
Cash and cash equivalents at beginning
   of period...................................        2,886              5,548
                                                    --------           --------
Cash and cash equivalents at end of period.....    $     998          $   2,072
                                                       =====              =====
Supplemental cash flow disclosures:
Income taxes paid..............................    $     126          $  12,861
                                                       =====              =====
</TABLE>

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

                                    -3-
<PAGE>

                     AMBASE CORPORATION AND SUBSIDIARIES
                  Notes to Consolidated Financial Statements


Note 1 - Organization

The accompanying  consolidated  financial  statements of AmBase  Corporation and
subsidiaries (the "Company") are unaudited and subject to year-end  adjustments.
All material intercompany transactions and balances have been eliminated. In the
opinion of management, the interim financial statements reflect all adjustments,
consisting of normal recurring adjustments, necessary for a fair presentation of
the Company's financial position and results of operations.  Results for interim
periods are not  necessarily  indicative  of results for the full year.  Certain
reclassifications  have been made to the 1998 consolidated  financial statements
to conform with the 1999  presentation.  The consolidated  financial  statements
have been prepared in accordance with generally accepted  accounting  principles
("GAAP").  The  preparation  of financial  statements  in  conformity  with GAAP
requires  management to make certain  estimates and  assumptions,  that it deems
reasonable,  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting   period.   Actual  results  could  differ  from  such  estimates  and
assumptions.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going  concern.  Substantial  contingent and
alleged  liabilities  exist  against the Company  through  certain  lawsuits and
governmental proceedings;  see Part II - Item 1. These factors raise substantial
doubt about the Company's ability to continue as a going concern.  The financial
statements  do not  include  adjustments  to the  carrying  value of assets  and
liabilities  which  might be  necessary  should  the  Company  not  continue  in
operation.  In order to  continue on a long-term  basis,  the Company  must both
resolve its  contingent and alleged  liabilities by prevailing  upon or settling
these claims for less than the amounts claimed and generate profits by acquiring
existing  operations and/or by developing new operations.  The Company continues
to evaluate a number of possible acquisitions,  and is engaged in the management
of its remaining  assets and  liabilities,  including the contingent and alleged
tax and  litigation  liabilities,  as described in Part II - Item 1. The Company
intends to  aggressively  contest  all  pending and  threatened  litigation  and
governmental  proceedings,  as well as pursue all sources for  contributions  to
settlements.  The unaudited interim financial statements presented herein should
be read in  conjunction  with the Company's  consolidated  financial  statements
filed in its Annual Report on Form 10-K for the year ended December 31, 1998.

The  Company's  main  source of  non-operating  revenue  is  interest  earned on
investment  securities and cash equivalents.  The Company's  management  expects
that operating  cash needs for the remainder of 1999 will be met  principally by
the Company's  current  financial  resources,  and the receipt of  non-operating
revenue consisting of interest income received on investment securities and cash
equivalents.

Note 2 - Legal Proceedings

The  Company  has  significant  alleged tax  liabilities  and is a defendant  in
certain  lawsuits and  governmental  proceedings,  the ultimate outcome of which
could have a material  adverse effect on its financial  condition and results of
operations.  Because  of the  nature  of the  contingent  and  alleged  tax  and
litigation  liabilities  described  in  Part  II -  Item  1,  and  the  inherent
difficulty  in  predicting  the  outcome  of  the  litigation  and  governmental
proceedings,  management  is unable to predict  whether the  Company's  recorded
reserves  will be adequate or its  resources  sufficient to satisfy its ultimate
obligations.  The accompanying  consolidated financial statements do not include
any  adjustments  that might  result  from the  outcome of these  uncertainties.
Although  the  basis  for the  calculation  of the  litigation  and  contingency
reserves  and  income tax  reserves  are  regularly  reviewed  by the  Company's
management and outside legal counsel,  the assessment of these reserves includes
an exercise  of  judgment  and is a matter of  opinion.  At June 30,  1999,  the
litigation  and  contingency  reserves,  other than for income tax issues,  were
$2,070,000.   For  a  discussion  of  alleged  tax  liabilities,   lawsuits  and
governmental proceedings, see Part II - Item 1.

In  addition  to the  litigation  and  contingency  reserves,  the Company has a
reserve  for  income  taxes of  $66,388,000  at June  30,  1999.  For a  further
discussion,  see Part II - Item 1 - Legal  Proceedings,  Disputes  with Internal
Revenue Service, Withholding Taxes (Netherlands Antilles).

See  Part II - Item 1 -  Legal  Proceedings,  for a  discussion  of  Supervisory
Goodwill Litigation and information  regarding the Company's claims against Home
Holdings, Inc.
                                   -4-
<PAGE>

                    AMBASE CORPORATION AND SUBSIDIARIES
           Notes to Consolidated Financial Statements (continued)

Note 3 - Cash and Cash Equivalents

Highly liquid  investments,  consisting  principally of funds held in short-term
money market accounts, are classified as cash equivalents.

Note 4 - Investment Securities

Investment  securities - held to maturity  consist of U.S.  Treasury  Bills with
original  maturities of one year or less and which are carried at amortized cost
based upon the  Company's  intent  and  ability  to hold  these  investments  to
maturity.

<TABLE>
<CAPTION>
Investment  securities - held to maturity at June 30, 1999 and December 31, 1998
consist of the following:

                                    June 30, 1999                              December 31, 1998
                        =====================================       ======================================
<S>                     <C>            <C>            <C>           <C>          <C>              <C>
                                                      Cost or                                      Cost or
                        Carrying       Amortized         Fair       Carrying      Amortized           Fair
(in thousands)             Value            Cost        Value          Value           Cost          Value
                          ======       =========      =======       ========      =========        =======

U.S. Treasury Bills    $  46,647       $  46,647     $ 46,625      $  47,156       $ 47,156      $  47,160
                          ======        ========      =======       ========        =======       ========
</TABLE>
<TABLE>
<CAPTION>
The gross  unrealized  gains  (losses) on  investment  securities at June 30 and
December 31 consist of the following:

                                              1999                         1998
                                              ====                         ====
                                                       (in thousands)
<S>                                           <C>                          <C>
Held to Maturity - Gross unrealized
   gains (losses)                         $   (22)                      $     4
                                           ======                        ======
</TABLE>
Other investment securities consist of convertible preferred and/or common stock
in AMDG, Inc., which were purchased through private  placements,  are classified
as other  assets,  and are  carried at cost  which  approximates  market  value;
$350,000 at June 30, 1999 and $100,000 at December 31, 1998.

                                    -5-
<PAGE>

Note 5 - Income Taxes

The Company and its 100% owned domestic subsidiaries file a consolidated federal
income tax return.  The Company  recognizes  both the current and  deferred  tax
consequences  of all  transactions  that have been  recognized  in the financial
statements,  calculated  based on the provisions of enacted tax laws,  including
the tax rates in effect for current and future  years.  Net  deferred tax assets
are  recognized  immediately  when a more likely than not criterion is met; that
is, unless a greater than 50% probability  exists that the tax benefits will not
actually be realized  sometime in the future.  The Company has  calculated a net
deferred  tax asset of $25  million,  as of June 30, 1999 and December 31, 1998,
arising primarily from net operating loss ("NOL")  carryforwards,  the excess of
book over tax reserves and  alternative  minimum tax credits (not  including the
anticipated tax effects of NOL's expected to be generated from the Company's tax
basis in Carteret  Savings Bank, F.A. and subsidiaries  ("Carteret"),  resulting
from  the  election  decision,  as more  fully  described  below).  A  valuation
allowance  has been  established  for the entire  net  deferred  tax  asset,  as
management,  at the current time,  has no basis to conclude that  realization is
more likely than not.

As a result of the  Office  of Thrift  Supervision's  ("OTS")  December  4, 1992
placement of Carteret in  receivership,  under the  management of the Resolution
Trust Corporation  ("RTC")/Federal  Deposit Insurance Corporation ("FDIC"),  and
proposed Treasury Reg. ss.1.597-4(g),  the Company had previously filed its 1992
and subsequent  federal income tax returns with Carteret  disaffiliated from the
Company's  consolidated  federal  income  tax  return.  Based upon the impact of
Treasury  Reg.  ss.1.597-4(g),  which was issued in final form on  December  20,
1995, a continuing review of the Company's tax basis in Carteret, and the impact
of prior year tax return  adjustments  on the Company's  1992 federal income tax
return as filed,  the Company decided not to make an election  pursuant to final
Treasury  Reg.   ss.1.597-4(g)  to  disaffiliate  Carteret  from  the  Company's
consolidated  federal  income tax return  effective  as of December 4, 1992 (the
"election decision").

The  Company has made  numerous  requests to the  RTC/FDIC  for tax  information
pertaining to Carteret and the resulting successor institution, Carteret Federal
Savings Bank ("Carteret  FSB"),  but this information has not yet been received.
Since the Company did not make the election  decision,  as described above, once
it receives the requested information from the RTC/FDIC,  the Company will amend
its  consolidated  federal  income tax returns to include the federal income tax
effects  of  Carteret  and  Carteret  FSB.  Based on the  information  currently
available, the Company does not believe a material increase in the Company's tax
liabilities will result.

The Company anticipates that, as a result of filing consolidated  federal income
tax  returns  with  Carteret  FSB,   approximately   $170  million  of  tax  NOL
carryforwards   will  be   generated   from   the   Company's   tax   basis   in
Carteret/Carteret  FSB as tax losses are incurred by Carteret FSB, of which $145
million are still available.  The NOL carryforwards generated from the Company's
tax basis in Carteret/Carteret  FSB would expire no earlier than 2007, and would
be  available  to  offset  future  taxable  income,   in  addition  to  the  NOL
carryforwards as noted below.

In June 1998,  the Company  paid  $12,700,000  to the IRS for tax and  estimated
interest in full satisfaction of the Company's Fresh Start tax liability,  which
related to a 1987 tax dispute  with the IRS. In  connection  with the  Company's
payment to the IRS,  the  Company  also  utilized  approximately  $40 million of
NOL's. As a result, the Company has remaining NOL carryforwards of approximately
$14 million  expiring  beginning  in 2008,  and $145 million of  additional  NOL
carryforwards  generated from the Company's tax basis in  Carteret/Carteret  FSB
expiring no earlier than 2007.

The Company  contractually assumed the tax liabilities of City Investing Company
("City"),  which,  prior to September 1985, owned all the outstanding  shares of
Common  Stock of the  Company.  For all periods  through  1992,  the IRS and the
Company  disagree only with respect to  withholding  taxes in connection  with a
Netherlands  Antilles finance  subsidiary of City. The Company's  federal income
tax returns for years subsequent to 1992 have not been reviewed by the IRS.

The Company has a reserve for income taxes of  $66,388,000 at June 30, 1999. For
a further  discussion,  see Part II - Item 1 - Legal Proceedings,  Disputes with
Internal Revenue Service, Withholding Taxes (Netherlands Antilles).

                                   -6-
<PAGE>

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

Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations,  which follows,  should be read in conjunction with the consolidated
financial statements and related notes, which are contained in Item 1, herein.

FINANCIAL CONDITION

The  Company's  assets  at June  30,  1999  aggregated  $49,401,000,  consisting
principally of cash and cash  equivalents of $998,000 and investment  securities
of $46,647,000. At June 30, 1999, the Company's liabilities,  including reserves
for contingent and alleged  liabilities,  as further described in Part II - Item
1, exceeded total recorded assets by $27,248,000.

The Company  contractually assumed the tax liabilities of City Investing Company
("City"),  which,  prior to September 1985, owned all the outstanding  shares of
Common  Stock of the  Company.  For all periods  through  1992,  the IRS and the
Company  disagree only with respect to  withholding  taxes in connection  with a
Netherlands  Antilles finance  subsidiary of City. The Company's  federal income
tax returns for years subsequent to 1992 have not been reviewed by the IRS.

With respect to the  Withholding  Taxes issue,  in connection with a Netherlands
Antilles finance subsidiary of City, on May 11, 1995, the IRS issued a Notice of
Deficiency for withholding taxes on interest payments for the years 1979 through
1985.  In the Notice of  Deficiency,  the IRS contends  that City's wholly owned
Netherlands  Antilles finance subsidiary should be disregarded for tax purposes.
The Company vigorously contested the IRS's position in accordance with the IRS's
internal  appeals  procedures.  In January 1992, the National  Office of the IRS
issued technical advice  supporting the auditing  agent's  position.  In October
1992, the Company  appealed this technical  advice to the National  Office.  The
National Office advised the Company that it expected to issue  technical  advice
supporting the auditing agent's position,  whereupon the Company advised the IRS
that it was withdrawing its technical advice request.

On June 30, 1995,  the Company  filed a petition in the United  States Tax Court
("Tax Court")  contesting the Notice of Deficiency.  The IRS filed its answer on
August 23, 1995. The Company filed a motion for summary judgment in its favor on
February 13, 1996. On April 17, 1996, the IRS filed a Notice of Objection to the
Company's motion for summary judgment. The Tax Court requested,  and the Company
filed,  on July 3, 1996, a reply to the IRS's Notice of Objection.  On September
19, 1996,  the Court denied the Company's  motion for summary  judgment  without
prejudice.  Based on the Tax Court's examination of the record and the status of
the discovery process, the Tax Court concluded that summary adjudication at this
time was inappropriate. The Tax Court directed the parties to engage in full and
complete  discovery as expeditiously as possible.  A trial was held in this case
on March 24, 1997, after which the Judge asked the IRS and the Company to submit
post-trial  briefs,  which have subsequently been submitted to the Tax Court. If
the IRS were to prevail on this issue, the Company would be liable for taxes and
interest in excess of the Company's financial resources.

In a case dealing with a similar  withholding tax issue,  the Tax Court ruled in
favor of the taxpayer, Northern Indiana Public Service Co. ("Northern Indiana"),
in November 1995. The Tax Court rejected the IRS's contention that interest paid
to Northern  Indiana's  foreign  subsidiary  were  subject to United  States tax
withholding. The IRS appealed this decision (Northern Indiana Public Service Co.
v.  Commissioner) to the United States Court of Appeals for the 7th Circuit (the
"Appeals Court").  The Appeals Court affirmed the Tax Court's ruling in favor of
Northern  Indiana.  Although the Appeals Court decision in the Northern  Indiana
case could be beneficial to the Company's case, it is not necessarily indicative
of the ultimate result of the final settlement of the Netherlands Antilles issue
between the Company and the IRS.

Based on an evaluation of the IRS's contention,  counsel has advised the Company
that, although the outcome in litigation can by no means be assured, the Company
has a very strong case and should prevail. Notwithstanding counsel's opinion and
the Tax Court's ruling in the Northern  Indiana case, it is not possible at this
time to determine the final  disposition of this issue,  when the issues will be
resolved,  or their final financial effect. A final disposition of this issue in
the  Company's  favor  would have a material  positive  effect on the  Company's
Consolidated Statement of Operations and Financial Condition.

                                    -7-
<PAGE>

The Company has a reserve for income taxes of  $66,388,000 at June 30, 1999. For
a further  discussion,  see Part II - Item 1 - Legal Proceedings,  Disputes with
Internal Revenue Service, Withholding Taxes (Netherlands Antilles).

At June 30, 1999, the litigation and contingency reserves, other than for income
tax issues,  were  $2,070,000.  For a  discussion  of alleged  tax  liabilities,
lawsuits and governmental proceedings, see Part II - Item 1.

The  Company  has  significant  alleged tax  liabilities  and is a defendant  in
certain  lawsuits and  governmental  proceedings,  the ultimate outcome of which
could have a material  adverse effect on its financial  condition and results of
operations.  Because of the nature of the contingent and alleged liabilities and
the  inherent  difficulty  in  predicting  the  outcome  of the  litigation  and
governmental proceedings,  management is unable to predict whether the Company's
recorded  reserves will be adequate or its  resources  sufficient to satisfy its
ultimate obligations.  The accompanying consolidated financial statements do not
include  any   adjustments   that  might   result  from  the  outcome  of  these
uncertainties.  Although the basis for the  calculation  of the  litigation  and
contingency  reserves and the income tax reserves are regularly  reviewed by the
Company's management and outside legal counsel, the assessment of these reserves
includes an exercise of judgment,  and is a matter of opinion.  For a discussion
of alleged tax liabilities,  lawsuits and governmental proceedings,  see Part II
Item 1.

The cash needs of the Company for the first six months of 1999 were  principally
satisfied  by  interest  income  received  on  investment  securities  and  cash
equivalents, and the Company's current financial resources.  Management believes
that the Company's  cash  resources are  sufficient to continue  operations  for
1999.

For  the six  months  ended  June  30,  1999,  cash of  $3,200,000  was  used by
operations, including the payment of prior year accruals and operating expenses,
partially offset by the receipt of interest income.

For the six  months  ended  June  30,  1998,  cash of  $15,783,000  was  used by
operations,  including the payment of  $12,700,000  to the IRS for the Company's
Fresh Start tax  liability  (which  related to a 1987 tax dispute with the IRS),
the  payment of prior year  accruals  and the  payment  of  operating  expenses,
partially offset by the receipt of interest income.

The  Company  continues  to evaluate a number of  possible  acquisitions  and is
engaged in the management of its remaining assets and liabilities, including the
contingent  and alleged tax and  litigation  liabilities,  as  described  above.
Extensive  discussions and  negotiations  are ongoing with respect to certain of
these  matters.  The  Company  intends to  aggressively  contest all pending and
threatened  litigation  and  governmental  proceedings,  as well as pursuing all
sources of  contributions  to  settlements.  In order to continue on a long-term
basis,  the Company must both resolve its contingent and alleged  liabilities by
prevailing upon or settling these claims for less than the amounts claimed,  and
generate  profits by acquiring  existing  operations  and/or by  developing  new
operations.

There were no material commitments for capital expenditures as of June 30, 1999.

                                    -8-

<PAGE>

Results of Operations
<TABLE>
<CAPTION>
Summarized  financial  information  of the Company for the second  quarter ended
June 30 is as follows:

                                          Second Quarter                Six Months
                                         1999         1998           1999         1998
                                         ====         ====           ====         ====
                                          (in thousands)              (in thousands)
<S>                                   <C>         <C>           <C>           <C>
Operating expenses:
Compensation and benefits...........  $   817     $    444      $   1,701     $    958
Professional and outside services...    1,347          380          1,412          650
Insurance...........................       17           22             35           45
Occupancy...........................       28           22             51           43
Other operating.....................       36           12             84           55
                                       ------      -------         ------      -------
                                        2,245          880          3,283        1,751
                                       ------      -------         ------      -------
Operating loss......................   (2,245)        (880)        (3,283)      (1,751)
                                       ------      -------         ------      -------
Interest income.....................      523          593          1,054        1,225
Other income........................       61            -            104            -
                                       ------      -------         ------      -------
Loss before income taxes............   (1,661)        (287)        (2,125)        (526)
Income tax expense..................      (68)         (64)          (123)        (128)
                                       ------      -------         ------      -------
Net loss............................  $(1,729)    $   (351)     $  (2,248)    $   (654)
                                       ======      =======       ========      =======
</TABLE>
The Company's main source of non-operating  revenue is interest income earned on
investment  securities and cash equivalents.  The Company's  management  expects
that operating  cash needs for the remainder of 1999 will be met  principally by
the  Company's  current  financial  resources  and the receipt of  non-operating
revenue  consisting of interest income earned on investment  securities and cash
equivalents.

The  Company  recorded  a net  loss of  $1,729,000,  or  $0.04  per  share,  and
$2,248,000,  or $0.05 per share for the second quarter and six months ended June
30, 1999, respectively,  compared to a net loss of $351,000, or $0.01 per share,
and $654,000,  or $0.02 per share,  for the second  quarter and six months ended
June 30, 1998, respectively. The increase in the net loss for the second quarter
and six month periods ended June 30, 1999 is due  principally  to an increase in
professional and outside services fees, as further described below.

Compensation  and benefits  increased to $817,000 and  $1,701,000  in the second
quarter and six months ended June 30, 1999, respectively, compared with $444,000
and $958,000 in the respective 1998 periods. The increase in the 1999 periods is
due to the accrual on a monthly basis of 1999 incentive  compensation,  which is
not  guaranteed,  as compared to accruing these amounts at year-end,  and also a
higher level of benefit accruals.

Professional and outside services  increased to $1,347,000 in the second quarter
ended June 30, 1999,  and to  $1,412,000  in the six months ended June 30, 1999,
compared to $380,000 and $650,000 in the respective  1998 periods.  The increase
in the 1999  periods  is  primarily  the result of legal  fees  attributable  to
supervisory goodwill  litigation,  offset to some extent by a reduction of legal
fees  attributable  to  the  Home  Holdings, Inc.  bankruptcy  case,  which were
incurred in the respective 1998 periods.

Insurance  expenses  decreased to $17,000 and $35,000 for the second quarter and
six months ended June 30, 1999, respectively, compared to $22,000 and $45,000 in
the same 1998 periods, due to management's continued  renegotiation of insurance
premiums.

Interest  income in the  second  quarter  and six  months  ended  June 30,  1999
decreased to $523,000 and $1,054,000, respectively, from $593,000 and $1,225,000
in the respective  1998 periods.  The decrease was primarily  attributable  to a
decreased yield on cash  equivalents and investment  securities  during the 1999
periods.

Other  income of $61,000 in the 1999  second  quarter and  $104,000  for the six
months ended June 30, 1999 is  principally  due to the collection by an inactive
subsidiary of a receivable previously considered uncollectible.

The income tax  provisions of $68,000 and $123,000 in the second quarter and six
months ended June 30, 1999, respectively, and $64,000 and $128,000 in the second
quarter  and six  months  ended  June  30,  1998,  respectively,  are  primarily
attributable to provisions for state taxes. Income taxes applicable to operating
income  (loss) are  generally  determined  by applying the  estimated  effective
annual  income tax rates to pretax income  (loss) for the  year-to-date  interim
period.  Income taxes applicable to unusual or infrequently  occurring items are
provided in the period in which such items occur.

                                   -9-
<PAGE>

Year 2000 Issue

The Company has completed  its review of year 2000 issues and has  determined it
will not have a material effect on the Company's business, results of operations
or financial condition.

ITEM 3.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company holds short-term investments as a source of liquidity. The Company's
interest rate sensitive investments at June 30, 1999 consist of the following:

                                                          Maturity Date
                                                   Less Than               Fair
(in thousands)                                      One Year              Value
                                                     =======              =====
U.S. Treasury Bills............................   $   46,647         $   46,625
                                                       =====              =====
Weighted average interest rate................         4.39%
                                                       =====

The  Company's  current  policy is to  minimize  the  interest  rate risk of its
short-term  investments by investing in U.S.  Treasury Bills with  maturities of
less than one year. There were no significant changes in market exposures or the
manner in which interest rate risk is managed during the quarter.



STOCKHOLDER INQUIRIES

Stockholder  inquiries,  including  requests  for the  following:  (i) change of
address;  (ii) replacement of lost stock  certificates;  (iii) Common Stock name
registration changes; (iv) Quarterly Reports on Form 10-Q; (v) Annual Reports on
Form 10-K; (vi) proxy material;  and (vii) information regarding stock holdings,
should be directed to:

         American Stock Transfer and Trust Company
         40 Wall Street, 46th Floor
         New York, NY  10005
         Attention:  Shareholder Services
         (800) 937-5449 or (718) 921-8200

In addition,  the Company's public reports,  including Quarterly Reports on Form
10-Q, Annual Reports on Form 10-K and Proxy Statements,  can be obtained through
the Securities  and Exchange  Commission  EDGAR  Database over the Internet,  at
www.sec.gov.

                                  -10-

<PAGE>

Part II - OTHER INFORMATION

Item 1.  Legal Proceedings

The information  contained in Item 8 - Note 13 in AmBase's Annual Report on Form
10-K for the year ended  December 31, 1998 and in AmBase's  Quarterly  Report on
Form 10-Q for the  quarterly  period  ended March 31, 1999 are  incorporated  by
reference  herein and the defined  terms set forth  below have the same  meaning
ascribed to them in those reports.  There have been no material  developments in
such legal proceedings, except as set forth below.

Marshall  Manley  v.  AmBase  Corporation.  The  trial  of  this  case  has been
adjourned by the Court until January 4, 2000.

The  actions  against  the  Company  are in various  stages.  Nevertheless,  the
allegations  and  claims  are  material  and,  if  successful,  could  result in
substantial  judgments  against the Company.  To the extent the aggregate of any
such judgments were to exceed the resources available,  these matters would have
a material  adverse effect on the Company's  financial  condition and results of
operations. Due to the nature of these proceedings,  the Company and its counsel
are unable to express any opinion as to their probable outcome.

Supervisory Goodwill  Litigation.  In June 1999, the Court extended the deadline
for  completing  case-specific  fact discovery in the Company's case to November
30, 1999.

AmBase Corporation v. Zurich SF Holdings, Inc. (f/k/a Reorganized Home Holdings,
Inc.).  On  or  about June 4, 1999, Zurich  SF Holdings, Inc. (f/k/a Reorganized
Home  Holdings, Inc.) filed  a  motion  to  dismiss  the  complaint filed by the
Company.  The Company  filed  a response to  the motion to dismiss in July 1999.
These motions are presently under submission with the Court.

                                    -11-
<PAGE>

ITEM 2.       CHANGES IN SECURITIES

Does not apply.

ITEM 3.       DEFAULTS UPON SENIOR SECURITIES

Does not apply.

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

At the Annual Meeting of Stockholders  on May 14, 1999, the following  proposals
were voted upon:

The following  persons were  nominated to be elected as directors,  as set forth
below:

                                                 Number of Shares
                                            For                Withheld

Richard A. Bianco                        38,021,859            234,470
John B. Costello                         38,027,684            228,645

There were no broker non-votes.

Stockholders  approved  the  appointment  of  PricewaterhouseCoopers  LLP as the
independent  accountants  of the Company for the year ending  December 31, 1999.
The shares were voted as follows: 38,147,545 shares for and 64,086 against, with
44,698 shares abstaining. There were no broker non-votes.

ITEM 5.       OTHER INFORMATION

None

ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits

      27.  Financial Data Schedule (only submitted to SEC in electronic format)

(b)   Form 8-K

      None

                                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.


AMBASE CORPORATION



By    JOHN P. FERRARA
      Vice President, Chief Financial Officer and Controller
      (Principal Financial and
      Accounting Officer)

Date:  August 9, 1999

                                  -12-
<PAGE>
                              EXHIBIT INDEX


Exhibit
  No.                 Description
-------               -----------

  27                  Financial Data Schedule - June 30, 1999



                                   -13-