SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q


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


                         For the quarterly period ended September 30, 2002

                                       or

            [   ]  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.)







                           100 PUTNAM GREEN, 3RD FLOOR
                        GREENWICH, CONNECTICUT 06830-6027


                 (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
    -------        -------

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in 12b-2 at the Exchange Act).

YES              NO   X
    -------        -------

At September 30, 2002, there were 46,208,519 shares outstanding of the
registrant's common stock, $0.01 par value per share.






<PAGE>



AmBase Corporation

Quarterly Report on Form 10-Q
September 30, 2002

TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                                              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..................................................8

Item 3.      Quantitative and Qualitative Disclosures About Market Risk..........................................11

Item 4.      Controls and Procedures.............................................................................11

PART II - OTHER INFORMATION

Item 1.      Legal Proceedings...................................................................................12

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

Signatures.......................................................................................................13

Certifications...................................................................................................13

</TABLE>





<PAGE>






PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                         AMBASE CORPORATION AND SUBSIDIARIES
                            Consolidated Balance Sheets
                       (in thousands, except for share amounts)
<TABLE>
<CAPTION>

                                                                                  September 30,       December 31,
                                                                                           2002               2001

                                                                                    (unaudited)
                                                                                       ========          =========

<S>                                                                                     <C>                <C>

Assets:
Cash and cash equivalents.........................................................    $   1,617        $     6,130
Investment securities:
    Held to maturity (market value $39,843 and $40,245, respectively).............       39,841             40,232
    Available for sale, carried at fair value ....................................          398                  -
                                                                                       --------           --------
Total investment securities.......................................................       40,239             40,232
                                                                                       --------           --------
Fixed assets, net of accumulated depreciation of $147 and $89, respectively.......        2,366              2,424
Investment in SDG, Inc. at cost...................................................            -              1,250
Other assets......................................................................           58                409
                                                                                       --------           --------

Total assets......................................................................   $   44,280           $ 50,445
                                                                                          =====              =====
Liabilities and Stockholders' Equity:
Liabilities:
Accounts payable and accrued liabilities..........................................   $    1,172        $     3,267
Supplemental retirement plan......................................................        7,377              6,682
Postretirement welfare benefits...................................................          815                913
Other liabilities.................................................................           88                 99
Litigation reserves...............................................................        1,353              1,471
                                                                                       --------           --------
Total liabilities.................................................................       10,805             12,432
                                                                                       --------           --------
Commitments and contingencies.....................................................            -                  -
                                                                                       --------           --------
Stockholders' equity:
Common stock ($0.01 par value, 200,000,000 authorized,
  46,335,007 issued)..............................................................          463                463
Paid-in capital...................................................................      547,940            547,940
Accumulated other comprehensive income (loss).....................................           (2)                 -
Accumulated deficit...............................................................     (514,279)          (509,743)
Treasury stock, at cost 126,488 shares............................................         (647)              (647)
                                                                                       --------           --------
Total stockholders' equity........................................................       33,475             38,013
                                                                                       --------           --------

Total liabilities and stockholders' equity........................................   $   44,280           $ 50,445
                                                                                          =====              =====
</TABLE>

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



<PAGE>

                       AMBASE CORPORATION AND SUBSIDIARIES
                      Consolidated Statements of Operations
                Third Quarter and Nine Months Ended September 30
                                   (Unaudited)
                      (in thousands, except per share data)
<TABLE>
<CAPTION>



                                                            Third Quarter                      Nine Months
                                                        2002             2001              2002             2001
                                                        ====             ====              ====             ====
<S>                                                 <C>             <C>              <C>              <C>
Operating expenses:

Compensation and benefits...................      $      872      $       762       $     2,670      $     2,472
Professional and outside services...........             431              290               861              681
Insurance...................................              15               23                60               51
Occupancy...................................              33               33                74              100
Other operating.............................              47               64               140              142
                                                    --------         --------          --------         --------
                                                       1,398            1,172             3,805            3,446
                                                    --------         --------          --------         --------
Operating loss..............................          (1,398)          (1,172)           (3,805)          (3,446)
                                                    --------         --------          --------         --------
Interest income.............................             189              432               570            1,745
Reversal of withholding obligation reserve..               -                -                 -           66,388
Other income................................              83               67               433              166
Write down of investments (see note 4)......          (1,600)               -            (1,600)               -
                                                    --------         --------          --------         --------
Income (loss) before income taxes...........          (2,726)            (673)           (4,402)          64,853
Income tax expense..........................             (44)             (44)             (134)            (154)
                                                    --------         --------          --------         --------
Net income (loss) ..........................     $    (2,770)     $      (717)      $    (4,536)     $    64,699
                                                       =====            =====             =====            =====

Income (loss) per common share:

Net income (loss) - basic........................$     (0.06)     $     (0.02)     $      (0.10)     $      1.40
                                                        =====            =====            =====            =====

Net income (loss) - assuming dilution............$     (0.06)     $     (0.02)     $      (0.10)     $      1.40
                                                        =====           =====             =====            =====
Weighted average shares outstanding:

Basic................................................  46,209           46,209             46,209          46,209
                                                        =====            =====             =====            =====
Diluted..............................................  46,339           46,279             46,379          46,270
                                                        =====            =====             =====            =====


</TABLE>


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

<PAGE>



                       AMBASE CORPORATION AND SUBSIDIARIES
              Consolidated Statement of Comprehensive Income (Loss)
                Third Quarter and Nine Months Ended September 30
                                   (Unaudited)
                                 (in thousands)
<TABLE>
<CAPTION>





                                                                                      Third Quarter         Nine Months
                                                                                               2002                2002
                                                                                             ======              ======
<S>                                                                                         <C>                 <C>
Net loss............................................................................  $     (2,770)         $   (4,536)

Unrealized holding losses on investment securities - available for sale, net of tax.          ( 29)                 (2)
                                                                                            --------          --------

Comprehensive income (loss).........................................................  $     (2,799)         $   (4,538)
                                                                                             ======             ======

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


</TABLE>







<PAGE>



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

<TABLE>
<CAPTION>






                                                                                           2002               2001
                                                                                           ====               ====
<S>                                                                                     <C>                 <C>

Cash flows from operating activities:

Net income (loss).................................................................    $  (4,536)          $  64,699
Adjustments to reconcile net income (loss) to net cash used by operations:
    Depreciation and amortization.................................................           59                 37
    Accretion of discount - investment securities.................................         (528)            (1,702)
Changes in other assets and liabilities:
    Write down of investments.....................................................        1,600                  -
    Other assets..................................................................          (11)                (8)
    Accounts payable and accrued liabilities......................................       (2,095)              (664)
    Litigation and contingency reserves uses......................................         (118)               (74)
    Reversal of withholding obligation reserve....................................            -          (  66,388)
    Other liabilities.............................................................          589                411

                                                                                       --------           --------
Net cash used by operating activities.............................................       (5,040)            (3,689)
                                                                                       --------           --------
Cash flows from investing activities:
Maturities of investment securities - held to maturity............................       88,800             60,295
Purchases of investment securities - held to maturity.............................      (87,881)           (57,569)
Purchases of investment securities - available for sale...........................         (400)                 -
Fixed assets purchase.............................................................            -             (2,434)
Other, net........................................................................            8                  9
                                                                                       --------           --------
Net cash provided by investing activities.........................................          527                301
                                                                                       --------           --------
Net decrease in cash and cash equivalents.........................................       (4,513)            (3,388)
Cash and cash equivalents at beginning of period..................................        6,130              4,844
                                                                                       --------           --------

Cash and cash equivalents at end of period........................................    $   1,617           $  1,456

                                                                                          =====              =====
Supplemental cash flow disclosures:

Income taxes paid.................................................................    $      157          $    177

                                                                                           =====             =====

</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 only of normal recurring adjustments unless otherwise disclosed,
necessary for a fair statement 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 prior
year consolidated financial statements to conform with the current year
presentation. The consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America ("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 Company continues to evaluate a number of possible acquisitions, and is
engaged in the management of its remaining assets and liabilities, including the
contingent assets and alleged liabilities, as described in Part II - Item 1. The
Company intends to aggressively contest all pending and threatened litigation
and contingencies, 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, 2001.

The Company's main source of non-operating revenue is interest earned on
investment securities and cash equivalents and rental income on the leased
portion of the building owned by the Company. The Company's management expects
that operating cash needs for the remainder of 2002 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 and rental income.

Note 2 - Legal Proceedings

The Company has certain alleged liabilities and is a defendant in certain
lawsuits. The accompanying consolidated financial statements do not include
adjustments that might result from an ultimate unfavorable outcome of these
uncertainties. Although the basis for the calculation of the litigation reserves
is 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 September 30, 2002, the litigation reserves were $1,353,000.

See Part II - Item 1 - Legal Proceedings, for a further discussion of the
Company's legal proceedings, including the Supervisory Goodwill Litigation.

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.

<PAGE>



                       AMBASE CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

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 - available for sale, consist of investments in equity
securities held for an indefinite period and are carried at fair value with net
unrealized gains and losses recorded directly in a separate component of
stockholders' equity.

Investment securities consist of the following:
<TABLE>
<CAPTION>




                                        September 30, 2002                                 December 31, 2001
                             ======================================           ======================================
                                               Cost or
                              Carrying       Amortized         Fair           Carrying      Amortized         Fair
(in thousands)                   Value            Cost         Value             Value           Cost        Value

                                ======          ======        ======            ======         ======       ======
<S>                          <C>             <C>            <C>                  <C>           <C>         <C>
Held to Maturity:
U.S. Treasury Bills
  maturing within

  one year                   $  39,841       $   39,841     $ 39,843           $ 40,232       $ 40,232      $ 40,245


Available for Sale:
Equity Securities                  398              400          398                  -                -            -
                             ----------         ---------    ----------      -----------     -----------   ----------
                             $  40,239       $   40,241    $  40,241         $  40,232      $  40,232     $   40,245
                                ======           ======       ======            ======         ======         ======
</TABLE>
The gross unrealized gains and losses on investment securities, at September 30,
2002 and December 31, 2001 consist of the following:
<TABLE>
<CAPTION>
(in thousands)                                                                                 2002         2001

                                                                                              =======       ======
<S>                                                                                              <C>         <C>
Held to Maturity:.
Gross unrealized gains                                                                      $       2     $     13
                                                                                              =======       ======
Available for Sale:
Gross unrealized gains (losses)                                                             $      (2)    $      -
                                                                                              =======       ======
</TABLE>

No investment securities - available for sale were sold in the first nine months
of 2002. At December 31, 2001, other investment securities of $350,000 consisted
of convertible  preferred and common stock in AMDG,  Inc.  ("AMDG"),  which were
purchased through private placements, classified as other assets, and carried at
cost.

In September  2002,  in  connection  with the ongoing  evaluation  of its
investments,  the Company  determined the value of its investments in SDG, Inc.,
("SDG") and AMDG has been other than  temporarily  impaired.  Under GAAP,  if an
investment  is other than  temporarily  impaired,  the  Company is  required  to
reflect an adjustment in their Financial  Statements.  Accordingly,  the Company
recorded a  write-down  of its  investments  in SDG and AMDG of  $1,250,000  and
$350,000, respectively.
<PAGE>


                       AMBASE CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

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, greater than 50% probability exists that the tax benefits will actually be
realized sometime in the future. The Company has calculated a net deferred tax
asset of $31 million as of September 30, 2002 and $30 million as of December 31,
2001, respectively arising primarily from net operating loss ("NOL")
carryforwards/carrybacks, alternative minimum tax ("AMT") 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 present 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 then
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's 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 filing of its
amended 1992 consolidated federal income tax return to include the federal
income tax effects of Carteret FSB (the "1992 Amended Return"), approximately
$56 million of NOL carryforwards are generated for tax year 1992 which expire in
2007, with the remaining approximately $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.

Based upon the Company's federal income tax returns as filed from 1993 to 2001
(subject to IRS audit adjustments), and excluding the NOL carryforwards
generated from the Company's tax basis in Carteret/Carteret FSB, as noted above,
at September 30, 2002 the Company has NOL carryforwards aggregating
approximately $30.6 million, available to reduce future federal taxable income
which expire if unused beginning in 2008. The Company's federal income tax
returns for years subsequent to 1992 have not been reviewed by the IRS.

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 AMT credit carryforwards ("AMT Credits"), which are not subject to
expiration. As further discussed below the Company has filed several carryback
claims with the IRS seeking to realize approximately $8 million of the $21
million of AMT credits.

The Company has filed several carryback claims with the IRS (the "Carryback
Claims"), seeking refunds from the IRS of alternative minimum tax and other
federal income taxes paid by the Company in prior years plus applicable IRS
interest. The Carryback Claims are currently being reviewed by the IRS. The
Company can give no assurances that the Carryback Claims will be allowed by IRS,
the final amount of the refunds, if any, or when they might be received.

<PAGE>

                       AMBASE CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements


Note 6 - Comprehensive Income

Comprehensive income (loss), for the third quarter and nine months ended
September 30, 2002, is composed of net income (loss) and other comprehensive
income (loss) which includes the change in unrealized gains on investment
securities available for sale, as follows:

<TABLE>
<CAPTION>



(in thousands)                                          Third Quarter                      Nine Months
                                                  ========================           ======================
                                              Unrealized        Accumulated      Unrealized        Accumulated
                                              Gains (Losses)       Other         Gains (Losses)      Other
                                             on Investment      Comprehensive    on Investment     Comprehensive
                                               Securities          Income          Securities        Income
                                               ========           ========           ========        ========
<S>                                                 <C>               <C>               <C>              <C>

Balance beginning of period.................  $       27        $       27       $          -      $        -

Change during the period....................         (29)              (29)                (2)             (2)
                                                 --------          --------           --------        --------
Balance end of period.......................  $       (2)      $        (2)      $         (2)     $       (2)

                                                    =====             =====              =====           =====
</TABLE>


Note 7 - Subsequent Events

In October 2002 the Company, through a wholly-owned  subsidiary,  entered into a
contract to purchase a 38,000 square foot office building in Greenwich, CT for
investment purposes. The purchase price is approximately $17,250,000 and will be
financed using the Company's currently available funds.



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 September 30, 2002  aggregated  $44,280,000  consisting
principally of cash and cash equivalents of $1,617,000 and investment securities
of  $40,239,000.  At September 30, 2002,  the Company's  liabilities,  including
reserves for litigation  liabilities,  described in Part II - Item 1, aggregated
$10,805,000. Total stockholders equity was $33,475,000.


The Company  has  certain  alleged  liabilities  and is a  defendant  in certain
lawsuits. Based upon an assessment of these proceedings the Company believes the
ultimate  outcome of the proceedings  will not have a material adverse effect on
its financial condition and results of operations. The accompanying consolidated
financial  statements  do not  include  adjustments  that might  result  from an
ultimate unfavorable outcome of these uncertainties.  Although the basis for the
calculation of the litigation  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 September 30, 2002, the
litigation reserves were $1,353,000. For a discussion of alleged liabilities and
lawsuits see Part II - Item 1.

For the nine months ended  September 30, 2002,  cash of  $5,040,000  was used by
operations, including the payment of prior year accruals and operating expenses,
partially  offset by the  receipt  of  interest  income.  The cash  needs of the
Company for the first nine months of 2002 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 2002.
<PAGE>


For the nine months ended  September 30, 2001,  cash of  $3,689,000  was used by
operations,  partially  offset by the receipt of interest  income  including the
payment of prior year accruals and operating expenses.


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 assets and alleged litigation liabilities. 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
contingencies, as well as pursue all sources for contributions to settlements.

In connection with an escrow account  established by Zurich SF Holdings LLC ("SF
Holdings")  pursuant to a June 2000 settlement  agreement with SF Holdings,  the
Company  requested,  in December 2001, the payment of  approximately  $1,500,000
from the escrow account for reimbursement of certain expenses previously paid by
the Company (the "Escrow Request").  SF Holdings refused to release escrow funds
for the payment of these  expenses.  As a result of SF  Holdings'  refusal,  the
Escrow Request was arbitrated in accordance  with the settlement  agreement.  In
October 2002 an arbitrator  denied the Company's Escrow Request and ordered that
the Company pay SF Holdings'  arbitration  expenses of  approximately  $520,000,
which is currently under review. Based on the arbitrator's  decision, the escrow
account was  terminated  and the  remaining  escrow  funds were  delivered to SF
Holdings in accordance with the agreement.

The Company  owns a 14,500  square feet office  building in  Greenwich,  CT. The
Company  utilizes  2,100  square feet for its  executive  offices and leases the
remaining approximately 12,400 square feet of office space to unaffiliated third
parties.


In October 2002 the Company, through a wholly-owned  subsidiary,  entered into a
contract to purchase a 38,000 square foot office building in Greenwich, CT for
investment purposes. The purchase price is approximately $17,250,000 and will be
financed using the Company's  currently available funds. The Company has made no
purchases  under its common  stock  repurchase  plan as of  September  30, 2002.
Except for the  purchase  of this  building,  there are no  additional  material
commitments for capital expenditures as of September 30, 2002. Inflation has had
no material impact on the business and operations of the Company.

From time to time, the Company may publish "Forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as amended (the
"Act"), and Section 21E of the Securities Exchange Act of 1934, as amended, or
make oral statements that constitute forward-looking statements. The
forward-looking statement may relate to such matters as anticipated financial
performance, future revenues or earnings, business prospects, projected
ventures, anticipated market performance, and similar matters. The Private
Securities Litigation Reform Act of 1995 provides a safe harbor for
forward-looking statements. In order to comply with the terms of the safe
harbor, the Company cautions readers that a variety of factors could cause the
Company's actual results to differ materially from the anticipated results or
other expectations expressed in the Company's forward-looking statements. These
risks and uncertainties, many of which are beyond the Company's control,
include, but are not limited to: (i) transaction volume in the securities
markets, (ii) the volatility of the securities markets, (iii) fluctuations in
interest rates, (iv) changes in regulatory requirements which could affect the
cost of doing business, (v) general economic conditions, (vi) changes in the
rate of inflation and the related impact on the securities markets, (vii)
changes in federal and state tax laws, and (viii) risks arising from unfavorable
decisions in our current material litigation matters, or unfavorable decisions
in other supervisory goodwill cases. The Company does not undertake any
obligation to update or revise any forward-looking statements whether as a
result of future events, new information or otherwise.

Results of Operations for the Third Quarter and Nine Months ended  September 30,
2002

The Company's main source of non-operating revenue is interest income earned on
investment securities and cash equivalents and rental income on the leased
portion of the building owned by the Company. The Company's management expects
that operating cash needs for the remainder of 2002 will be met principally by
the Company's current financial resources, the receipt of non-operating revenue
consisting of interest income earned on investment securities and cash
equivalents and rental income.
<PAGE>

The Company  recorded a net loss of $2,270,000 or $0.06 per share and $4,536,000
or $0.10 per share for the third  quarter and nine months  ended  September  30,
2002, respectively. The third quarter and nine month periods ended September 30,
2002,  include a charge of  $1,600,000  to reflect a write down of the Company's
investments in AMDG and SDG, as further  described  below. For the third quarter
ended  September 30, 2001, the Company  recorded a net loss of $717,000 or $0.02
per share.  For the nine months ended  September 30, 2001, the Company  recorded
net income of $64,699,000 or $1.40 per share, which includes non-recurring other
income representing the reversal of a withholding obligation reserve.  Excluding
this other income the Company would have  reported a net loss of $1,689,000  for
the nine months ended September 30, 2001.

Compensation and benefits increased to $872,000 and $2,670,000 in the third
quarter and nine months ended September 30, 2002, respectively, compared with
$762,000 and $2,472,000 in respective 2001 periods. The increases were
principally the result of a higher level of benefit accruals.

Professional and outside services were $431,000 in the third quarter ended
September 30, 2002, and $861,000 in the nine months ended September 30, 2002,
compared to $290,000 and $681,000 in the respective 2001 periods. The increase
in the 2002 periods is due to increases in legal and tax related professional
fees.

Occupancy expenses decreased to $74,000 in the nine month period ended September
30, 2002, compared with $100,000 in the respective 2001 period principally due
to the costs related to office relocation incurred in the 2001 period. Occupancy
expenses have not been reduced by tenant reimbursements or rental income, which
are included with other income in the Consolidated Statement of Operations.

Interest income in the third quarter and nine months ended September 30, 2002
decreased to $189,000 and $570,000 respectively, from $432,000 and $1,745,000 in
the respective 2001 periods. The decrease is principally due to a significant
decrease in the yield on investments in 2002 as compared to the 2001 periods and
to a lesser extent a decrease in the average level of investments held.

Other income of $83,000 for the third quarter ended September 30, 2002 is
principally attributable to rental income earned. Other income of $433,000 for
the nine month period ended September 30, 2002 is principally attributable to a
collection of $205,000 on an investment previously written off and rental income
earned. Other income of $67,000 and $166,000 in third quarter and nine months
ended September 30, 2001, respectively, is attributable to rental income earned
during the period of building ownership and the collection of a receivable
previously considered uncollectible.

As further noted above the nine month period ended September 30, 2001 includes a
$66,388,000 withholding obligation reserve reversal which is reflected as other
income in the Consolidated Statement of Operations.

In September 2002, in connection with the ongoing evaluation of its investments,
the Company  determined  the value of its  investments  in SDG and AMDG has been
other than  temporarily  impaired.  Under GAAP,  if an  investment is other than
temporarily impaired,  the Company is required to reflect an adjustment in their
Financial  Statements.  Accordingly,  the Company  recorded a write-down  of its
investments in SDG and AMDG of $1,250,000 and $350,000, respectively.

Factors  considered  in the Company's  decision to write down these  investments
included,  in part,  the general  inactive  status of SDG's and AMDG's  clinical
testing, as well as SDG's and AMDG's current financial condition. The Company is
not selling or disposing of its  investments in SDG or AMDG and remains  hopeful
that it will be able to fully realize its investment  value.  In September 2000,
the Company  filed a lawsuit  against SDG,  AMDG and certain of its officers and
directors to pursue  claims  against the parties,  including  but not limited to
SDG's failure to honor a contract which granted the Company the exclusive  right
to act as the exclusive investment  banking/financial advisor to SDG, and all of
its subsidiaries and affiliates.  See Part II - Item I, Legal  Proceedings,  for
further information.  The Company will continue to monitor the status of its SDG
and AMDG  investments  and  vigorously  pursue  recovery  of its  legal  claims.
However,  there can be no assurance  that the Company will be able to recoup all
or any part of its investment in these companies.
<PAGE>

The income tax provisions of $44,000 and $134,000 in the third quarter and nine
months ended September 30, 2002, respectively and $44,000 and $154,000 for the
third quarter and nine months ended September 30, 2001, 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.

<PAGE>



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 September 30, 2002 and December 31, 2001
with maturity dates of less than one year consist of the following:
<TABLE>
<CAPTION>




                                                               2002                              2001
                                                         =================                =================
                                                   Carrying           Fair          Carrying         Fair
                                                     Value            Value           Value          Value
(in thousands)                                    ----------        --------       ----------       -------
<S>                                                <C>                <C>            <C>            <C>


U.S. Treasury Bills.........................     $   39,841        $  39,843       $   40,232      $ 40,245
                                                    =======          =======          =======       =======

Weighted average interest rate..............          1.65%                             1.87%
                                                    =======                           =======
</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 period.


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
         59 Maiden Lane
         New York, NY  10038
         Attention:  Shareholder Services
         (800) 937-5449 or (718) 921-8200 Ext. 6820

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>

ITEM 4.  CONTROLS AND PROCEDURES


The Company maintains disclosure controls and procedures that are designed to
ensure that information required to be disclosed in the Company's Exchange Act
reports is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms, and that such information is accumulated
and communicated to the Company's management, including its Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure based closely on the definition of "disclosure
controls and procedures" in Rule 13a-14(c). In designing and evaluating the
disclosure controls and procedures, management recognized that any controls and
procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives, and management
necessarily was required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures. Also, the Company has
investments in certain unconsolidated entities. As the Company does not control
or manage these entities, its controls and procedures with respect to such
entities are necessarily substantially more limited than those it maintains with
respect to its consolidated subsidiaries.

Within 90 days prior to the date of this report, the Company carried out an
evaluation, under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and the Company's
Chief Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures. Based on the foregoing, the
Company's Chief Executive Officer and Chief Financial Officer concluded that the
Company's disclosure controls and procedures were effective.

There have been no significant changes in the Company's internal controls or in
other factors that could significantly affect the internal controls subsequent
to the date the Company completed its evaluation.

<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, 2001, is incorporated by reference herein
and the defined terms set forth below have the same meaning ascribed to them in
that report. There have been no material developments in such legal proceedings,
except as set forth below.

AmBase Corporation v. City Investing Company Liquidating Trust, et al. -
Marshall Manley litigation. In July 2002 the district court dismissed the
Company's complaint after which the Company filed a motion for reconsideration,
which was denied by the district court. The Company has determined that it is
not in its best interest to pursue an appeal of this matter.

Litigation with SDG, Inc.- In September 2000, the Company filed a lawsuit in the
United  States  District  Court  for  the  District  of  Connecticut  (Case  No.
3:00CV1694  (DJS)) against SDG Inc.  ("SDG"),  AMDG Inc. ("AMDG") and certain of
their  respective  officers and directors to pursue  various claims against such
parties,  including,  but not  limited  to, the claim that SDG failed to honor a
binding  contract  which  granted the Company the right to act as the  exclusive
investment   banking/financial   advisor  to  SDG,  and  its   subsidiaries  and
affiliates.  The defendants have filed various  counterclaims  which the Company
believes are without  merit.  The Company will continue to monitor the status of
SDG and AMDG and vigorously pursue the matter. See "Management's  Discussion and
Analysis of Financial  Condition and Results of Operations" for a description of
the Company's investments in SDG and AMDG

Supervisory Goodwill Litigation. - In August 2002, both the Court of Appeals for
the Federal Circuit and the Court of Federal Claims issued decisions  addressing
Takings Clause claims  advanced by  shareholders  of failed  thrifts.  Castle v.
United States,  301F. 3d 1328 (Fed. Cir. 2002); Bailey v. United States, 53 Fed.
C1. 251, 2002 U.S.  Claims LEXIS 203 (Fed. C1. Aug.14,  2002).  On September 11,
2002,  the  Company  submitted  a motion for leave to file a  memorandum  of law
addressing  the relevance of these  decisions to the Company's  pending  Takings
Clause  claim,  attached  to which was a copy of the  Company's  memorandum.  On
September  26, 2002,  the  Department of Justice  ("DOJ")  opposed the Company's
motion for leave to file this  memorandum.  On September  30, 2002,  the Federal
Deposit Insurance Corporation ("FDIC"), as the  plantiff-intervenor in the case,
filed a brief in  response  to the  Company's  memorandum  of law. On October 9,
2002,  the Court  partially  granted  the  Company's  motion for leave to file a
memorandum of law addressing these recent decisions, but required the memorandum
to be no  greater  than 20 pages in length  and to focus  exclusively  on issues
relating to liability under the Takings  Clause,  rather than on issues relating
to the payment of  compensation.  The Court also  provided  that any response to
this motion be filed within 14 days of the service of the Company's  memorandum.
In accordance  with the Court's Order,  on October 17, 2002, the Company filed a
revised  memorandum of law addressing these recent  decisions.  In October 2002,
the DOJ filed a response to the Company's memorandum.

Item 5.       OTHER INFORMAITON

In October 2002 the Company, through a wholly-owned  subsidiary,  entered into a
contract to purchase a 38,000 square foot office building in Greenwich, CT for
investment purposes. The purchase price is approximately $17,250,000 and will be
financed using the Company's currently available funds.


Item 6.       EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits

      None

(b)   Reports on Form 8-K


      None


<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    /s/JOHN P. FERRARA
      Vice President, Chief Financial Officer and Controller
      (Duly Authorized Officer and Principal Financial and
      Accounting Officer)

Date: November 12, 2002


<PAGE>

                                  CERTIFICATION


I, certify that:

1. I have reviewed this quarterly report on Form 10-Q of AmBase
Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
 establishing and maintaining disclosure controls and procedures (as defined in
 Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared:

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of
the  disclosure  controls  and  procedures  based  on our  evaluation  as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any  fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.





Date: November 12, 2002
                               /s/ Richard A. Bianco
                               Richard A. Bianco
                               Chairman, President and Chief Executive Officer



<PAGE>

                                  CERTIFICATION


I, certify that:

1. I have reviewed this quarterly report on Form 10-Q of AmBase Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
 establishing and maintaining disclosure controls and procedures (as defined in
 Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared:

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of
the  disclosure  controls  and  procedures  based  on our  evaluation  as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any  fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the registrant's internal controls; and


6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.





Date: November 12, 2002

                        /s/John P. Ferrara
                        John P. Ferrara
                        Vice President, Chief Financial Officer, and Controller