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 March 31, 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 March 31, 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
March 31, 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
                            Quarter Ended March 31
                                 (Unaudited)
                   (in thousands, except per share data)

<TABLE>
<CAPTION>
                                                          1999             1998
                                                          ====             ====
<S>                                                  <C>              <C>
Operating expenses:
Compensation and benefits.......................     $     884        $     514
Professional and outside services...............            65              270
Insurance.......................................            18               23
Occupancy.......................................            23               21
Other operating.................................            48               43
                                                      --------         --------
                                                         1,038              871
                                                      --------         --------
Operating loss..................................        (1,038)            (871)
                                                      --------         --------
Interest income.................................           531              632
Other income....................................            43                -
                                                      --------         --------
Loss before income taxes........................          (464)            (239)
Income tax expense..............................           (55)             (64)
                                                      --------         --------

Net loss........................................     $    (519)       $    (303)
                                                      --------         --------
Earnings per common share:
Net loss - basic................................     $   (0.01)       $   (0.01)
Net loss - assuming dilution....................         (0.01)           (0.01)
                                                         =====            =====

Average shares outstanding......................        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>
                                                    March 31,      December 31,
                                                         1999              1998
                                                  (unaudited)
                                                   =========          =========
<S>                                               <C>                <C>
Assets
Cash and cash equivalents.......................  $    1,894         $    2,886
Investment securities - held to maturity
   (market value $46,437 and $47,160,
   respectively)................................      46,437             47,156
Investment in SDG, Inc. at cost.................       1,250              1,250
Other assets....................................         557                346
                                                    --------           --------

Total assets....................................  $   50,138         $   51,638
                                                       =====              =====
Liabilities and Stockholders' Equity
Liabilities:
Accounts payable and accrued liabilities........  $      625         $    1,642
Supplemental retirement plan....................       5,196              5,079
Postretirement welfare benefits.................       1,261              1,301
Other liabilities...............................         117                152
Litigation and contingency reserves.............       2,070              2,076
Income tax reserves.............................      66,388             66,388
                                                    --------           --------
Total liabilities...............................      75,657             76,638
                                                    --------           --------
Commitments and contingencies...................           -                  -
                                                    --------           --------
Stockholders' equity:
Common stock....................................         447                447
Paid-in capital.................................     547,712            547,712
Accumulated deficit............................     (573,031)          (572,512)
Treasury stock.................................         (647)              (647)
                                                    --------           --------
Total stockholders' equity.....................      (25,519)           (25,000)
                                                    --------           --------

Total liabilities and stockholders' equity.....   $   50,138         $   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
                             Quarter Ended March 31
                                 (in thousands)


<TABLE>
<CAPTION>
                                                        1999               1998
                                                        ====               ====
<S>                                                <C>                 <C>
Cash flows from operating activities:
Net loss.......................................    $    (519)          $   (303)
Adjustments to reconcile net loss to net
   cash used by operations:
Other assets...................................           35                 39
Accounts payable and accrued liabilities.......       (1,017)            (1,035)
Litigation and contingency reserves uses.......           (6)               (68)
Other liabilities..............................           43                  -
Amortization of discount - investment
   securities..................................         (525)              (611)
Other, net.....................................            3                  2
                                                    --------           --------
Net cash used by operating activities..........       (1,986)            (1,976)
                                                    --------           --------
Cash flows from investing activities:
Maturities of investment securities
   - held to maturity..........................       23,446              4,650
Purchases of investment securities
   - held to maturity..........................      (22,202)            (7,099)
Purchases of other investment securities.......         (250)                 -
Proceeds from Home Holdings, Inc. receivable...            -                  7
Other, net.....................................            -                 25
                                                    --------           --------
Net cash provided (used) by investing
   activities..................................          994             (2,417)
                                                    --------           --------
Net decrease in cash and cash equivalents......         (992)            (4,393)
Cash and cash equivalents at beginning
   of period...................................        2,886              5,548
                                                    --------           --------
Cash and cash equivalents at end of period.....    $   1,894          $   1,155
                                                       =====              =====
Supplemental cash flow disclosures:
Income taxes paid..............................    $      53          $      74
                                                       =====              =====
</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 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 March 31,  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 March  31,  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 March 31, 1999 and December 31, 1998
consist of the following:

                          March 31, 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          $  46,437   $  46,437 $ 46,437  $  47,156    $ 47,156  $47,160
                   ========   =========  =======   ========   =========  =======
</TABLE>
<TABLE>
<CAPTION>
The gross  unrealized  gains  (losses) on investment  securities at March 31 and
December 31 consist of the following:

                                               1999                         1998
                                              ======                      ======
                                                        (in thousands) 
<S>                                         <C>                        <C>
Held to Maturity - Gross unrealized
   gains (losses)                           $      -                   $       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 March 31, 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 March 31, 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 March 31, 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 March 31,  1999  aggregated  $50,138,000,  consisting
principally of cash and cash equivalents of $1,894,000 and investment securities
of $46,437,000. At March 31, 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 $25,519,000.

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 March 31, 1999. For
a further  discussion,  see Part II - Item 1 - Legal Proceedings,  Disputes with
Internal Revenue Service, Withholding Taxes (Netherlands Antilles).

At March 31, 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  three  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 three  months  ended  March 31,  1999,  cash of  $1,986,000  was used by
operations, including the payment of prior year accruals and operating expenses,
partially offset by the receipt of interest income.

For the three  months  ended  March 31,  1998,  cash of  $1,976,000  was used by
operations, including the payment of prior year accruals and 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 March 31,
1999.

                                    -8-
<PAGE>

Results of Operations
<TABLE>
<CAPTION>
Summarized  financial  information  of the Company for the first  quarter  ended
March 31 is as follows:
                                                         1999              1998
                                                             (in thousands)
<S>                                                   <C>               <C>
Operating expenses:
Compensation and benefits....................         $   884           $   514
Professional and outside services............              65               270
Insurance....................................              18                23
Occupancy....................................              23                21
Other operating..............................              48                43
                                                       ------            ------
                                                        1,038               871
                                                       ------            ------
Operating loss...............................          (1,038)             (871)
                                                       ------            ------
Interest income..............................             531               632
Other income.................................              43                 -
                                                       ------            ------
Loss before income taxes.....................            (464)             (239)
Income tax expense...........................             (55)              (64)
                                                       ------            ------
Net loss.....................................         $  (519)          $  (303)
                                                         ====              ====
</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 $519,000, or $0.01 per share, for  the first
quarter ended  March 31, 1999 compared  to  a net loss of $303,000, or $0.01 per
share, for the first quarter ended March 31, 1998.

Compensation and benefits increased to $884,000 in the first quarter ended March
31, 1999, compared  with  $514,000  for the 1998 first quarter.  The increase 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  decreased  to $65,000 in the first  quarter
ended March 31, 1999,  compared to $270,000 in the respective  1998 period.  The
decrease  is  primarily  the  result  of  legal  fees  attributable  to the Home
Holdings, Inc. bankruptcy case incurred in the first quarter of 1998.

Insurance  expenses  decreased to $18,000 in the first  quarter  ended March 31,
1999,  from  $23,000  in the same 1998  period,  due to  management's  continued
renegotiation of insurance premiums.

Interest income in the first quarter ended March 31, 1999 decreased to $531,000,
from  $632,000  in the  respective  1998  period.  The  decrease  was  primarily
attributable to a decreased yield on cash equivalents and investment  securities
during the 1999 period.

Other income of $43,000 in the 1999 first quarter is due to the collection by an
inactive subsidiary of a receivable previously considered uncollectible.

The income tax provision of $55,000 and $64,000 in the first quarter ended March
31, 1999 and 1998,  respectively,  is primarily  attributable to a provision 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  March 31, 1999 consist of the
following:

                                               Maturity Date
                                                   Less Than               Fair
(in thousands)                                      One Year              Value
                                                     =======              =====
U.S. Treasury Bills............................   $   46,437         $   46,437
                                                     =======              =====
Weighted average interest rate.................         4.4%
                                                     =======

The  Company's  current  policy  is  to  minimize the interest rate risk of it's
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  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.

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.  Fact  discovery is currently  ongoing in the
Company's  suit against the United States  pending in the United States Court of
Federal  Claims.  On April 5,  1999,  the Court  extended  to July 31,  1999 the
deadline for completing  case-specific fact discovery in thirty  Winstar-related
lawsuits,  including  the  Company's  case. On April 9, 1999 and April 16, 1999,
respectively,  the Court issued decisions  addressing damage claims in two other
Winstar-related  cases,  Glendale  Federal  Bank,  FSB  v.  United  States,  and
California  Federal  Bank v. United  States.  In the  Glendale  case,  the Court
awarded  Glendale  $908.9 million in restitution  and  non-overlapping  reliance
damages, representing the benefit conferred on the government as a result of the
contract at issue in that case, plus certain non-overlapping damages suffered by
Glendale as a result of the government's breach of contract.  The Court declined
to award expectation damages as requested by Glendale. In the California Federal
case,   the  Court  awarded   California   Federal  $23.4  million  in  damages,
representing  expenses incurred by California  Federal in raising new capital to
replace the supervisory  goodwill lost as a result of the government's breach of
contract. The Court declined to award expectation damages, restitution, or other
reliance  damages as requested by California  Federal.  The Company expects that
both of these  decisions  will be appealed to the United States Court of Appeals
for the Federal Circuit. The trial court and anticipated  appellate decisions in
Glendale and California Federal may be relevant to the Company's claims, but are
not necessarily  indicative of the ultimate outcome of the Company's  action. No
assurance can be given regarding the ultimate outcome of the litigation.

AmBase Corporation v. Zurich SF Holdings, Inc. (f/k/a Reorganized Home Holdings,
Inc.).  In 1991,  the Company  sold its entire  interest  in The Home  Insurance
Company ("Home  Insurance") and its  subsidiaries to Home Holdings,  Inc. ("Home
Holdings")  pursuant to an agreement  dated as of September 28, 1990 (as amended
the "Stock  Purchase  Agreement").  As part of the sale proceeds,  Home Holdings
agreed to pay  certain  amounts  to the  Company  over a period of years to meet
certain  specified  obligations  of the Company,  as  incurred,  relating to tax
issues, litigation and administrative expenses.

On January 15, 1998,  Home Holdings filed a voluntary  petition for relief under
Chapter  11 of the United  States  Bankruptcy  Code  ("Chapter  11"),  which was
subsequently amended, culminating in the Revised Third Amended and Restated Plan
of Reorganization  (the "Revised Plan"). The Revised Plan was confirmed by order
of the Bankruptcy  Court dated June 9, 1998, and was declared  effective on July
29, 1998.

Pursuant to the Revised Plan, on July 30, 1998, the Company received $15,200,000
in full  satisfaction  of all of the Company's  claims relating to Home Holdings
other than certain disputed claims relating to Section  7.4(c)(iii) of the Stock
Purchase  Agreement (the "Disputed  Claims").  The Company's rights against Home
Holdings  with regard to the  Disputed  Claims were  preserved  and survived the
effective  date of the Revised Plan.  The Revised Plan further  provided  credit
support for any amounts due the Company on account of the Disputed Claims in the
form of a Keepwell Agreement provided by Zurich Reinsurance Centre Holdings.  In
April 1999,  the Company  filed a complaint in the Supreme Court of New York for
the Disputed Claims.

                                    -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

None

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:  May 14, 1999

                                  -12-

<PAGE>
                         EXHIBIT INDEX


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

  27                   Financial Data Schedule - March 31, 1999




                                    - 13 -