<PAGE>


                                    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, 2000

       [  ]  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, 2000,  there were 46,208,519  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, 2000
<TABLE>
<CAPTION>

CROSS REFERENCE SHEET FOR
PARTS I and II
                                                                                                               Page
                                                                                                              ------
<S>          <C>                                                                                                <C>

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

</TABLE>

<PAGE>

                                      - 1 -

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>

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



                                                             Second Quarter                      Six Months
                                                        2000             1999              2000             1999
                                                        ====             ====              ====             ====
Operating expenses:
Compensation and benefits...................     $       884      $       817       $     1,823      $     1,701
Professional and outside services...........           1,069            1,347             1,359            1,412
Insurance...................................              23               17                37               35
Occupancy...................................              22               28                46               51
Other operating.............................              42               36                78               84
                                                    --------         --------          --------         --------
                                                       2,040            2,245             3,343            3,283
                                                    --------         --------          --------         --------
Operating loss..............................          (2,040)          (2,245)           (3,343)          (3,283)
                                                    --------         --------          --------         --------
Interest income.............................             676              523             1,258            1,054
Other income................................           8,308               61             8,358              104
                                                    --------         --------          --------         --------
Income (loss) before income taxes...........           6,944           (1,661)            6,273           (2,125)
Income tax expense..........................             (55)             (68)             (110)            (123)
                                                    --------         --------          --------         --------
Net income (loss)...........................     $     6,889      $    (1,729)      $     6,163      $    (2,248)
                                                       =====            =====             =====            =====
Earnings per common share:
Net income (loss) - basic...................     $      0.15   $       (0.04)    $        0.13     $      (0.05)
Net income (loss) - assuming dilution.......            0.15           (0.04)             0.13            (0.05)
                                                       =====            =====             =====            =====

Average shares outstanding..................          46,209            44,534           46,199           44,534
                                                       =====            =====             =====            =====
</TABLE>

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


<PAGE>


                       AMBASE CORPORATION AND SUBSIDIARIES
                           Consolidated Balance Sheets
                                 (in thousands)

<TABLE>
<CAPTION>

<S>                                                                                 <C>               <C>

                                                                                       June 30,       December 31,
                                                                                           2000               1999
                                                                                    (unaudited)
                                                                                       ========          =========
Assets
Cash and cash equivalents.........................................................   $    1,334        $     2,646
Investment securities - held to maturity (market
    value $50,362 and $43,259, respectively)......................................       50,373             43,260
Investment in SDG, Inc. at cost...................................................        1,250              1,250
Other assets......................................................................          487                522
                                                                                       --------           --------

Total assets......................................................................   $   53,444         $   47,678
                                                                                          =====              =====
Liabilities and Stockholders' Equity
Liabilities:
Accounts payable and accrued liabilities..........................................   $     1,290        $    1,902
Supplemental retirement plan......................................................         5,789             5,545
Postretirement welfare benefits...................................................         1,105             1,178
Other liabilities.................................................................            98               106
Litigation and contingency reserves...............................................         1,882             1,983
Income tax reserves...............................................................        66,388            66,388
                                                                                       --------           --------
Total liabilities.................................................................        76,552            77,102
                                                                                       --------           --------
Commitments and contingencies.....................................................            -                  -
                                                                                       --------           --------
Stockholders' equity:
Common stock......................................................................           463               455
Paid-in capital...................................................................       547,940           547,795
Accumulated deficit...............................................................      (570,864)         (577,027)
Treasury stock....................................................................          (647)             (647)
                                                                                       --------           --------
Total stockholders' equity........................................................       (23,108)          (29,424)
                                                                                       --------           --------

Total liabilities and stockholders' equity........................................   $   53,444         $   47,678
                                                                                          =====              =====
</TABLE>

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


<PAGE>


                       AMBASE CORPORATION AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                            Six Months Ended June 30
                                  (Unaudited)
                                 (in thousands)

<TABLE>
<CAPTION>

<S>                                                                                   <C>                 <C>
                                                                                           2000               1999
                                                                                           ====               ====
Cash flows from operating activities:
Net income (loss).................................................................    $   6,163           $ (2,248)
Adjustments to reconcile net income (loss) to net cash provided (used) by operations:
Other assets......................................................................           27                 73
Accounts payable and accrued liabilities..........................................         (612)              (109)
Litigation and contingency reserves uses..........................................         (101)                (6)
Other liabilities.................................................................          162                126
Amortization of discount - investment securities..................................       (1,231)            (1,043)
Other, net........................................................................            9                  7
                                                                                       --------           --------
Net cash provided (used) by operating activities..................................        4,417             (3,200)
                                                                                       --------           --------
Cash flows from investing activities:
Maturities of investment securities - held to maturity............................       66,600             60,006
Purchases of investment securities - held to maturity.............................      (72,482)           (58,454)
Purchases of other investment securities..........................................            -               (250)
Other, net........................................................................            -                 10
                                                                                       --------           --------
Net cash provided (used) by investing activities..................................       (5,882)             1,312
                                                                                       --------           --------
Cash flows from financing activities:
Stock options exercised...........................................................          153                  -
                                                                                       --------           --------
Net cash provided by financing activities.........................................          153                  -
                                                                                       --------           --------
Net decrease in cash and cash equivalents.........................................       (1,312)            (1,888)
Cash and cash equivalents at beginning of period..................................        2,646              2,886
                                                                                       --------           --------
Cash and cash equivalents at end of period........................................    $   1,334           $    998
                                                                                          =====              =====
Supplemental cash flow disclosures:
Income taxes paid.................................................................    $     125         $      126
                                                                                          =====              =====
</TABLE>

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


<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 1999 consolidated  financial statements
to conform with the 2000  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, 1999.

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 2000 will be met  principally by
the Company's  current  financial  resources,  and the receipt of  non-operating
revenue  consisting  of  interest  income  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,  2000,  the
litigation  and  contingency  reserves,  other than for income tax issues,  were
$1,882,000.   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,  2000.  For a  further
discussion,  see Part II - Item 1 - Legal  Proceedings,  Dispute  with  Internal
Revenue Service over Withholding Taxes (Netherlands Antilles).

See  Part II - Item 1 -  Legal  Proceedings,  for a  discussion  of  Supervisory
Goodwill   Litigation  and  information   regarding  the  Company's   litigation
settlement with Zurich SF Holdings, Inc.

<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 are carried at amortized cost based
upon the Company's intent and ability to hold these investments to maturity.

Investment  securities - held to maturity at June 30, 2000 and December 31, 1999
consist of the following:

<TABLE>
<CAPTION>

                                            June 30, 2000                                   December 31, 1999
                             ========================================         ========================================
<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          $ 50,373        $ 50,373      $ 50,362          $  43,260       $ 43,260     $   43,259
                                ======         ======        ======             ======         ======         ======
</TABLE>

The gross  unrealized  losses on investment  securities  was $11,000 at June 30,
2000 and $1,000 at December 31, 1999.

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, 2000 and December 31, 1999.


<PAGE>

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


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 $26  million  as of June 30,  2000 and $28  million as of
December  31,  1999,   arising   primarily   from  net  operating  loss  ("NOL")
carryforwards,  alternative  minimum tax credits and the excess of book over tax
reserves (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  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"); however all of the information still has not been
received.  Based on the Company not making the election  decision,  as described
above,  and the receipt of some of the requested  information from the RTC/FDIC,
the  Company  has amended  its 1992  consolidated  federal  income tax return to
include the federal income tax effects of Carteret and Carteret FSB. The Company
is still in the process of amending its consolidated  federal income tax returns
for 1993 and subsequent years.

The  Company  anticipates  that,  as a result of filing a  consolidated  federal
income tax return with  Carteret FSB, a total of  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 $158
million are still available for future use. Based on the Company's recent filing
of its  amended  1992  consolidated  federal  income tax  return to include  the
federal  income tax effects of Carteret  FSB,  approximately  $56 million of NOL
carryforwards  are  generated  for tax year 1992 which expire in 2007,  with the
remaining  approximate  $102  million  of  NOL  carryforwards  to be  generated,
expiring no earlier  than 2008.  These NOL  carryforwards  would be available to
offset future taxable income,  in addition to the NOL  carryforwards  as further
detailed below.

In June 1998,  the Company  paid  $12,700,000  to the IRS for tax and  estimated
interest to be applied to the Company's Fresh Start tax liability, which related
to a 1987 tax dispute  with the IRS.  Based on a Final  Stipulation  between the
Company and the IRS on the Fresh Start issue, the Company is presently  awaiting
the IRS's final  calculation of interest on the Fresh Start issue. In connection
with the Final Stipulation,  the Company anticipates utilizing approximately $29
million of NOL's.

Based upon the Company's  federal  income tax returns as filed from 1993 to 1998
(subject  to  IRS  audit  adjustments),  after  utilizing  $29  million  of  NOL
carryfowards in connection with Fresh Start;  and excluding the NOL carryfowards
generated from the Company's tax basis in Carteret/Carteret FSB, as noted above,
at June 30, 2000 the Company has NOL carryforwards aggregating approximately $20
million,  available  to reduce  future  federal  taxable  income which expire if
unused beginning in 2008.

<PAGE>

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

The utilization of certain  carryforwards  is subject to limitations  under U.S.
federal income tax laws. In addition,  the Company has approximately $21 million
of  alternative  minimum  tax  credit  carryforwards,  which are not  subject to
expiration.

In  connection  with the  liquidation  of City  Investing  Company  ("City") the
Company,  among others,  contractually  assumed certain tax liabilities of City,
which, prior to September 1985, owned all the outstanding shares of Common Stock
of the Company.  Other liabilities were assumed by, among others, City Investing
Company  Liquidating  Trust (the "Trust").For all periods through 1992, the only
issue that remains in dispute with the IRS is with respect to withholding  taxes
in  connection  with  a  Netherlands   Antilles   finance   subsidiary  of  City
("Withholding  Taxes").  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, 2000. For
a further  discussion,  see Part II - Item 1 - Legal  Proceedings,  Dispute with
Internal Revenue Service over Withholding Taxes (Netherlands Antilles).

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,  2000  aggregated  $53,444,000  consisting
principally of cash and cash equivalents of $1,334,000 and investment securities
of $50,373,000. At June 30, 2000, the Company's liabilities,  including reserves
for contingent and alleged  liabilities,  as further described in Part II - Item
1, exceeded total recorded assets by $23,108,000.

In June 2000 the Company  entered  into a  settlement  agreement  with Zurich SF
Holdings LLC (f/k/a Reorganized Home Holdings, Inc.)("SF Holdings") settling the
disputed  claims  relating to the April 1999  complaint the Company filed in the
Supreme Court of New York.  Pursuant to the  settlement  agreement,  the Company
received,  among other things,  net proceeds of $8,250,000 from SF Holdings.  In
addition,  an  affiliate  of SF  Holdings  deposited  $9,500,000  in an interest
bearing escrow  account (the "Escrow  Account") to be used to pay 50% of certain
expenses and/or tax obligations,  if any, up to the amount in the Escrow Account
in connection  with the dispute with the Internal  Revenue  Service ("IRS") over
the Netherlands  Antilles  Withholding Tax Issue.  Upon final  resolution of the
Netherlands  Antilles  Withholding  Tax  Issue  with  the  IRS  and  payment  of
outstanding  expenses,  the  residual  of the Escrow  Account,  if any,  will be
delivered to an affiliate of SF Holdings.

In  connection  with the  liquidation  of City  Investing  Company  ("City") the
Company,  among others,  contractually  assumed certain tax liabilities of City,
which, prior to September 1985, owned all the outstanding shares of Common Stock
of the Company.  Other liabilities were assumed by, among others, City Investing
Company  Liquidating  Trust (the "Trust").For all periods through 1992, the only
issue that remains in dispute with the IRS is with respect to withholding  taxes
in  connection  with  a  Netherlands   Antilles   finance   subsidiary  of  City
("Withholding  Taxes").  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,  on behalf of City,  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.

<PAGE>

On June 30, 1995, the Company, on behalf of City, 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 were submitted to the Tax
Court in August  1997.  If the IRS were to prevail on this  issue,  the  Company
could be liable  for taxes and  interest  in excess of the  Company's  financial
resources.  A  significant  factor in  determining  the amount of the  Company's
ultimate  liability  for  this  issue is  whether  pursuant  to the  contractual
arrangement  between the Company and City,  the Company is primarily  liable for
such taxes and interest.  See Part II - Item 1 - Legal Proceedings, AmBase
Corporation v. City Investing Company Liquidating Trust et al. for further
information.

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  was  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"). In June 1997 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 case involving City , it is not
necessarily  indicative  of the ultimate  result of the final  settlement of the
Netherlands Antilles issue involving City.

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.

The Company has a reserve for income taxes of  $66,388,000 at June 30, 2000. For
a further  discussion,  see Part II - Item 1 - Legal  Proceedings,  Dispute with
Internal Revenue Service over Withholding Taxes (Netherlands Antilles).

At June 30, 2000, the litigation and contingency reserves, other than for income
tax issues,  were  $1,882,000.  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 2000 were  principally
satisfied by proceeds  received in  connection  with the SF Holdings  litigation
settlement  further  described  above,  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 2000.

For the six months  ended June 30,  2000,  cash of  $4,417,000  was  provided by
operations,  as a result of amounts  received in connection with the SF Holdings
litigation  settlement  further  discussed  above,  and the  receipt of interest
income,  partially  offset by the payment of prior year  accruals and  operating
expenses.

<PAGE>

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.  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, 2000.

Results of Operations

Summarized  financial  information of the Company for the second quarter and six
months ended June 30 is as follows:

<TABLE>
<CAPTION>
                                                            Second Quarter                       Six Months
                                                        2000             1999              2000             1999
                                                        ====             ====              ====             ====
<S>                                             <C>                 <C>             <C>              <C>

Operating expenses:
Compensation and benefits...................     $       884        $     817       $     1,823      $     1,701
Professional and outside services...........           1,069            1,347             1,359            1,412
Insurance...................................              23               17                37               35
Occupancy...................................              22               28                46               51
Other operating.............................              42               36                78               84
                                                    --------         --------          --------         --------
                                                       2,040            2,245             3,343            3,283
                                                    --------         --------          --------         --------
Operating loss..............................          (2,040)          (2,245)           (3,343)          (3,283)
                                                    --------         --------          --------         --------
Interest income.............................             676              523             1,258            1,054
Other income................................           8,308               61             8,358              104
                                                    --------         --------          --------         --------
Income (loss) before income taxes...........           6,944           (1,661)            6,273           (2,125)
Income tax expense..........................             (55)             (68)             (110)            (123)
                                                    --------         --------          --------         --------
Net income (loss)...........................     $     6,889      $    (1,729)      $     6,163      $    (2,248)
                                                       =====            =====             =====            =====
</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 2000 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 net income of $6,889,000 or $0.15 per share, and $6,163,000
or $0.13 per share for the second  quarter and six months  ended June 30,  2000.
The second quarter and six month periods ended June 30, 2000 include  $8,250,000
of other  income  representing  net  proceeds  received in  connection  with the
Company's  litigation  settlement  with Zurich SF Holdings LLC, ("SF  Holdings")
further  described  below.  Excluding  this other income the Company  would have
reported net loss of $1,361,000  and  $2,087,000  for the second quarter and six
months ended June 30, 2000, respectively.  For the second quarter and six months
ended June 30, 1999 the Company  recorded a net loss of  $1,729,000 or $0.04 per
share, and $2,248,000 or $0.05 per share.

Compensation  and benefits  increased to $884,000 and  $1,823,000  in the second
quarter and six months ended June 30, 2000, respectively, compared with $817,000
and $1,701,000 in the respective  1999 periods.  The increases are primarily due
to an  increase in the accrual  for 2000  incentive  compensation,  which is not
guaranteed, as compared to prior year accruals.

Professional and outside services  were $1,069,000 in the second quarter
ended June 30, 2000,  and  $1,359,000  in the six months ended June 30, 2000,
compared to $1,347,000  and  $1,412,000  in the  respective  1999  periods.
The amounts in the 2000 and 1999  periods  are principally comprised of
expenses relating to the Supervisory  Goodwill  litigation as further discussed
in Part II Item 1.

<PAGE>

Interest  income in the  second  quarter  and six  months  ended  June 30,  2000
increased to $676,000 and $1,258,000, respectively, from $523,000 and $1,054,000
in the respective 1999 periods. The increases were primarily  attributable to an
increased yield on investments and a higher average level of investments held in
2000 compared with 1999.

Other income of $8,308,000 and $8,358,000 in second quarter and six months ended
June 30, 2000,  respectively,  is principally  attributable to $8,250,000 of net
proceeds  received  in  June  2000,  relating  to  the  SF  Holdings  litigation
settlement  further  described  above.  The additional  other income in the 2000
periods  is due to the  continued  collection  by an  inactive  subsidiary  of a
receivable previously considered uncollectible.

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

The income tax  provisions of $55,000 and $110,000 in the second quarter and six
months ended June 30, 2000 respectively,  and $68,000 and $123,000 in the second
quarter  and six  months  ended  June  30,  1999,  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.

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, 2000 and December 31, 1999 with
maturity dates of less than one year consist of the following:

<TABLE>
<CAPTION>
                                                            2000                            1999
                                                   =======================       ==========================
                                                   Carrying       Fair           Carrying         Fair
                                                     Value        Value            Value          Value
(in thousands)                                     -----------    --------       -----------      ---------
<S>                                                <C>           <C>              <C>            <C>


U.S. Treasury Bills.........................       $  50,373     $  50,362        $  43,260      $  43,259
                                                   =========     =========        =========      =========

Weighted average interest rate..............            5.69%                         4.81%
                                                       ======                        ======
</TABLE>

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 year.

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.


<PAGE>


Part II - OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS

The information  contained in Item 8 - Note 11 in AmBase's Annual Report on Form
10-K for the year ended  December 31, 1999 and in AmBase's  Quarterly  Report on
Form 10-Q for the  quarterly  period  ended March 31, 2000 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.

(a)  The Company is or has been a defendant in a number of lawsuits or proceed-
     ings, including the following:

Marshall Manley v. AmBase Corporation.  The plaintiff's case was tried to a jury
during May, 2000.  Post-trial  briefs have recently been submitted to the Court.
Manley  is  seeking  the  amounts  he paid to  Finley,  Kumble,  Wagner,  Heine,
Underberg,  Manley & Casey, of $2,400,000,  plus reimbursement of his legal fees
and interest.

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.

 (b)  Supervisory Goodwill Litigation

In August 2000, Judge Loren Smith issued an order scheduling oral argument, in
his court on October 2, 2000, on the Company's Motion for Partial Summary
Judgment On Liability under the Fifth Amendment's Takings Clause, and on the
matter of Contract Liability.

  (c)  Other

Claims Against Zurich SF Holdings, Inc. In June 2000 the Company  entered  into
a settlement agreement with Zurich SF Holdings LLC (f/k/a  Reorganized Home
Holdings, Inc.) ("SF Holdings") settling the disputed  claims  relating to the
April 1999 complaint the Company filed in the  Supreme  Court of New York and
the separate proceeding commenced by the Company  against SF  Holdings  in
December 1999.  Pursuant to the settlement agreement,  the Company received,
among other things, net proceeds of $8,250,000 from SF Holdings.  In addition,
an affiliate of SF Holdings deposited $9,500,000 in an interest  bearing escrow
account (the "Escrow Account") to be used to pay 50% of certain expenses and/or
tax obligations, if any, up to the amount in the Escrow Account in connection
with the dispute with the Internal Revenue Service("IRS") over the Netherlands
Antilles Withholding Tax Issue which is currently pending  before the  United
State Tax Court.  Upon filal reolution of the Netherlands  Antilles
Withholding Tax Issue with the IRS and payment of outstanding  expenses, the
residual of the Escrow Account, if any, will be delivered to an affiliate of SF
Holdings.

AmBase Corporation v. City Investing Company Liquidating Trust, et al.  In
August 2000, the Company filed a  complaint against City Investing Company
Liquidating Trust (the "Trust") seeking determination by the Delaware Chancery
Court that the Trust, as successor to City Investing Company, (as opposed to
AmBase Corporation), should be primarily liable for amounts, if any, owed to
the IRS in connection with the NV Withholding Tax Issue.  The Company is also
seeking other relief and certain other damages from the Trust.  No assurance
can be given regarding the ultimate outcome of the litigation.


<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

Does not apply.

ITEM 5.       OTHER INFORMATION

At the Annual Meeting of  Stockholders  on May 19, 2000 the following  proposals
were voted upon:

The  following  person  nominated,  was elected to be a  director,  as set forth
below:
<TABLE>
<CAPTION>

                                                      Number of Shares
                                                 For                  Withhold
                                             ==========               ========
<S>                                          <C>                      <C>
Robert E. Long                               35,879,113               529,210
</TABLE>

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, 2000.
The shares were voted as  follows:  36,198,362  shares for and 158,267  against,
with 51,694 shares abstaining. There were no broker non-votes.

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

      Registrant  filed a Current Report on Form 8-K prior on the filing of this
      Form 10-Q for the quarter ended June 30, 2000 as follows:

      Date          Event Reported

      June 9, 2000  Settlement Agreement between AmBase Corporation and Zurich
                    SF Holdings LLC dated June 9, 2000.

<PAGE>

                                 SIGNATURES


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


AMBASE CORPORATION



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

Date:  August 14, 2000