UNITED STATES
                       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, 2004

                                       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

          (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 Rule 12b-2 of the Exchange Act).

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


     At September 30, 2004,  there were  46,233,519  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, 2004
<TABLE>
<CAPTION>
<S>     <C>                                         <C>
TABLE OF CONTENTS                                   Page
                                                   ------

PART I - FINANCIAL INFORMATION

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

Item 2.      Management's Discussion and Analysis of
                   Financial Condition and Results of Operations.................................................13

Item 3.      Quantitative and Qualitative Disclosures About Market Risk..........................................15

Item 4.      Controls and Procedures.............................................................................16

PART II - OTHER INFORMATION

Item 1.      Legal Proceedings...................................................................................17

Item 4.      Submission of Matters to a Vote of Security Holders.................................................17

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

Signatures   ....................................................................................................19
</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>
<S>                                                                               <C>                 <C>

                                                                                  September 30,       December 31,
                                                                                           2004               2003
                                                                                     (unaudited)
                                                                                       ========          =========
Assets:
Cash and cash equivalents.........................................................    $   9,523        $     2,785
Investment securities:
    Held to maturity (market value $8,544 and $17,331, respectively)..............        8,552             17,329
    Available for sale, carried at fair value ....................................        3,228              1,774
                                                                                       --------           --------
Total investment securities.......................................................       11,780             19,103
                                                                                       --------           --------
Accounts receivable...............................................................            1                 21
Real estate owned:
  Land............................................................................        6,954              6,954
  Buildings and improvements......................................................       12,810             12,810
                                                                                       --------           --------
                                                                                         19,764             19,764
  Less:  accumulated depreciation.................................................         (681)              (433)
                                                                                       --------           --------
Real estate owned, net............................................................       19,083             19,331
Other assets......................................................................          573                428
                                                                                       --------           --------
Total assets......................................................................   $   40,960         $   41,668
                                                                                       ========           ========
Liabilities and Stockholders' Equity:
Liabilities:
Accounts payable and accrued liabilities..........................................       $1,269         $    1,376
Supplemental retirement plan......................................................       10,616              9,292
Other liabilities.................................................................        1,577              1,633
                                                                                       --------           --------
Total liabilities.................................................................       13,462             12,301
                                                                                       --------           --------
Commitments and contingencies.....................................................            -                  -
                                                                                       --------           --------
Stockholders' equity:
Common stock ($0.01 par value, 200,000,000 authorized, 46,410,007 and
  46,335,007 issued, respectively)................................................          464                463
Paid-in capital...................................................................      547,956            547,940
Accumulated other comprehensive income............................................          236                 84
Accumulated deficit...............................................................     (520,473)          (518,435)
Treasury stock, at cost - 176,488 shares..........................................         (685)              (685)
                                                                                       --------           --------
Total stockholders' equity........................................................       27,498             29,367
                                                                                       --------           --------

Total liabilities and stockholders' equity........................................   $   40,960         $   41,668
                                                                                       ========           ========
</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>
<S>                                                     <C>            <C>               <C>           <C>
                                                           Third Quarter                     Nine Months
                                                        2004           2003              2004          2003
                                                        ====           ====              ====          ====
Revenues:
Rental income..........................................$  561          $ 615            $ 1,652        $ 1,846

Operating expenses:
Compensation and benefits.............................. 1,021            982              3,130          3,036
Professional and outside services......................   213            270                505            912
Property operating and maintenance ....................   117            158                344            397
Depreciation  .........................................    83             83                248            246
Insurance..............................................    21             37                 83             79
Other operating .......................................    35             43                129            152
                                                     ----------      ----------         ----------     ----------
                                                        1,490          1,573              4,439          4,822
                                                     ----------      ----------         ----------     ----------
Operating loss ........................................  (929)          (958)            (2,787)        (2,976)
                                                     ----------      ----------         ----------     ----------
Interest income........................................   142             71                380            242
Realized gains on sales of investment securities ......   123             12                459             64
                                                     ----------      ----------         ----------     ----------
Loss before income taxes...............................  (664)          (875)            (1,948)        (2,670)
Income tax expense.....................................   (30)           (32)               (90)           (94)
                                                     ---------       ----------         ----------     ----------
Net loss...............................................$ (694)         $(907)           $ (2,038)      $(2,764)
                                                     =========       ==========         ==========     ==========
Net loss per common share:

Net loss - basic.......................................$(0.01)        $(0.02)           $  (0.04)      $ (0.06)
Net loss - assuming dilution........................... (0.01)         (0.02)              (0.04)        (0.06)
                                                     =========       ==========         ==========     ==========
Weighted average common shares outstanding:

Basic..................................................46,234         46,159              46,222        46,190
                                                     ============    ==========         ==========     ==========
Diluted................................................46,234         46,159              46,222        46,190
                                                     ============    ==========         ==========     ==========
</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>
<S>                                                                        <C>        <C>      <C>          <C>

                                                                            Third Quarter         Nine Months
                                                                           2004       2003     2004         2003
                                                                          ======      =====    =====        =====

Net loss..............................................................   $ (694)    $  (907)  $(2,038)    $(2,764)

Unrealized holding gains on investment securities
     available for sale, net of tax effect of $0......................       90         (29)      157          13
                                                                        --------    -------   --------    ---------

Comprehensive loss....................................................  $  (604)    $  (936)  $(1,881)    $(2,751)
                                                                        ========    =======   ========    =========
</TABLE>

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


                       AMBASE CORPORATION AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                         Nine Months Ended September 30
                                   (Unaudited)
                                 (in thousands)
<TABLE>
<CAPTION>
<S>                                                                                        <C>           <C>
                                                                                           2004          2003
                                                                                           ====          ====
Cash flows from operating activities:
Net loss......................................................................           $(2,038)      $(2,764)
Adjustments to reconcile net loss to net cash used by operations:
    Depreciation and amortization.............................................               248           246
    Accretion of discount - investment securities.............................               (77)         (149)
     Realized gains on investment securities available for sale...............              (459)          (64)
Changes in other assets and liabilities:
    Accounts receivable.......................................................                20           107
    Other assets..............................................................              (145)         (166)
    Accounts payable and accrued liabilities..................................              (107)         (407)
    Other liabilities.........................................................             1,268         1,171
                                                                                         --------       --------
Net cash used by operating activities.........................................            (1,290)       (2,026)
                                                                                         --------       --------
Cash flows from investing activities:
Maturities of investment securities - held to maturity........................            25,894        36,654
Purchases of investment securities - held to maturity.........................           (17,040)      (36,631)
Purchases of investment securities - available for sale.......................           (17,426)         (674)
Sales of investment securities - available for sale...........................            16,583           641
Building improvements.........................................................                 -           (38)
                                                                                         --------       --------
Net cash provided (used) by investing activities..............................             8,011           (48)
                                                                                         --------       --------
Cash flows from financing activities:
Stock options exercised.......................................................                17             -
Common stock repurchase.......................................................                 -           (38)
                                                                                        ---------       --------
Net cash provided (used) by financing activities..............................                17           (38)
                                                                                        ---------       --------
Net increase (decrease) in cash and cash equivalents..........................             6,738        (2,112)
Cash and cash equivalents at beginning of period..............................             2,785         4,918
                                                                                        ---------       --------
Cash and cash equivalents at end of period....................................            $9,523        $2,806
                                                                                        =========       ========
Supplemental cash flow disclosures:
Income taxes paid.............................................................              $121        $  124
                                                                                        =========       ========
</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 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, 2003.

     The  Company's  assets  currently   consist  primarily  of  cash  and  cash
equivalents,  investment  securities,  and real estate owned. The Company's main
source of operating  revenue is rental income  earned on real estate owned.  The
Company also earns non-operating  revenue  principally  consisting of investment
earnings on investment securities and cash equivalents. The Company continues to
evaluate a number of possible acquisitions,  and is engaged in the management of
its assets and  liabilities,  including the contingent  assets,  as described in
Part II - Item 1. The Company intends to aggressively contest all litigation and
contingencies, as well as pursue all sources for contributions to settlements.

     The  Company's  management  expects  that  operating  cash  needs  for  the
remainder of 2004 will be met principally by rental income received, the receipt
of  non-operating  revenue  consisting  of  investment  earnings  on  investment
securities and cash equivalents, and the Company's current financial resources.

     Note 2 - Legal Proceedings

     For a discussion of the Company's legal proceedings, including a discussion
of the Company's  Supervisory Goodwill litigation,  see Part II - Item 1 - Legal
Proceedings.

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


                                             September 30, 2004                             December 31, 2003
                             ============================================     =========================================
                                              Cost or                                       Cost or
                              Carrying       Amortized        Fair           Carrying      Amortized           Fair
(in thousands)                   Value         Cost           Value            Value           Cost            Value
                                ======      ==========      =======           ======       =========           ======
Held to Maturity:
U.S. Treasury Bills maturing within
  one year ...............   $   8,552      $    8,552      $ 8,544          $ 17,329      $   17,329          $17,331

Available for Sale:
Equity Securities.........       3,228           2,992        3,228             1,774           1,690            1,774
                             -----------     -----------    ---------        ----------     -----------        ---------
                             $  11,780      $   11,544      $11,772          $ 19,103      $    19,019         $19,105
                             ===========    ============    =========        ==========    ============        =========
</TABLE>

     The gross unrealized gains (losses) on investment securities,  at September
30, 2004 and December 31, 2003 consist of the following:
<TABLE>
<CAPTION>
<S>                                                                                           <C>           <C>

(in thousands)                                                                                 2004          2003
                                                                                              =======       =======
Held to Maturity:.
Gross unrealized gains (losses)..................................................           $     (8)       $     2
                                                                                              =======       =======
Available for Sale:
Gross unrealized gains...........................................................           $    285        $    84
                                                                                              =======       =======

Gross unrealized losses..........................................................           $    (49)       $     -
                                                                                              =======       =======
</TABLE>

<PAGE>


                       AMBASE CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements


     The realized gain on the sales of investment  securities available for sale
for the third quarter and nine months ended September 30, 2004, are as follows:
<TABLE>
<CAPTION>
<S>                                                                   <C>         <C>           <C>         <C>
                                                                         Third Quarter              Nine Months
(in thousands)                                                         2004        2003          2004        2003
                                                                      ======      ======        ======      ======

Net sale proceeds................................................... $ 8,310      $  311       $ 16,583     $  641
Cost basis..........................................................  (8,187)       (299)       (16,124)      (577)
                                                                     -------      ------       --------     -------
Realized gains...................................................... $   123      $   12       $    459     $   64
                                                                     =======      ======       ========     =======
</TABLE>

     During the nine months ended  September 30, 2004 the Company  purchased and
sold a $7 million U.S.  Treasury  Note  resulting in a gain of $89,000  which is
included  in  realized  gains  on  investment  securities  in  the  Consolidated
Statement of Operations.

     During the third quarter ended  September 30, 2004,  the Company  purchased
and sold an $8.0  million  U.S.  Treasury  Note,  resulting in a gain of $24,000
which is included in realized gains on investment securities in the Consolidated
Statement of Operations  for the third  quarter and nine months ended  September
30, 2004.


<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 $35 million and $34 million as of  September  30, 2004 and December 31,
2003,   respectively,   arising   primarily  from  net  operating  loss  ("NOL")
carryforwards,  alternative  minimum  tax ("AMT")  credits  (not  including  the
anticipated tax effects of NOL's expected to be generated from the Company's tax
basis in Carteret  Savings Bank, F.A. and subsidiaries  ("Carteret"),  resulting
from  the  election  decision,  as more  fully  described  below).  A  valuation
allowance  has been  established  for the entire  net  deferred  tax  asset,  as
management,  at the current time,  has no basis to conclude that  realization is
more likely than not.

     As a  result  of the  Office  of  Thrift  Supervision's  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 "1992  Amended
Return").  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 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.
The IRS is currently  reviewing the Company's  1992 Amended Return in connection
with several carryback claims filed by the Company,  as further described below.
The Company can give no assurances  with regard to the 1992 Amended  Return,  or
amended  returns for subsequent  years, or the final amount or expiration of NOL
carryforwards ultimately generated from the Company's tax basis in Carteret.

     In March 2000, the Company filed several carryback claims and amendments to
previously filed carryback claims with the IRS (the "Carryback  Claims") seeking
refunds from the IRS or  alternative  minimum tax and other federal income taxes
paid by the Company in prior years plus  applicable  IRS interest,  based on the
filing of the 1992 Amended Return.  The Carryback Claims and 1992 Amended Return
are currently  being reviewed by the IRS. In April 2003, IRS examiners  issued a
letter to the Company  proposing to disallow the Carryback  Claims.  The Company
has sought  administrative  review of the letter by  protesting  to the  Appeals
Division of the IRS.  The Company has met with IRS Appeals  Officials to discuss
the Carryback Claims and the appeals process is ongoing. The Company can give no
assurances that the Carryback Claims will be ultimately  allowed by the IRS, the
final amount of the refunds, if any, or when they might be received.

     Based upon the Company's  federal  income tax returns as filed from 1993 to
2003 (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,  2004,  the  Company  has  NOL   carryforwards,   aggregating
approximately  $35.6 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.

<PAGE>

                       AMBASE CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

     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.  Based on the filing of the Carryback  Claims,  as further discussed
above,  the  Company is seeking to realize  approximately  $8 million of the $21
million of AMT Credits.

     Note 6 - Comprehensive Income (Loss)

     Comprehensive  income  (loss) is  composed  of net income  (loss) and other
comprehensive  income  (loss)  which  includes  the change in  unrealized  gains
(losses) on investment securities available for sale, as follows:
<TABLE>
<CAPTION>
<S>                                              <C>              <C>                    <C>                <C>
(in thousands)                                          Third Quarter Ended                     Nine Months Ended
                                                        September 30, 2004                      September 30, 2004
                                                    ===========================             ============================
                                                    Unrealized      Accumulated             Unrealized        Accumulated
                                                 Gains (Losses)           Other           Gains(Losses)             Other
                                                 on Investment    Comprehensive          on Investment      Comprehensive
                                                    Securities           Income             Securities             Income
                                                 =============    =============          =============      =============

Balance beginning of period...................   $      146       $       146            $        84        $       84

Reclassification adjustment for gains
        realized in net loss..................          (91)              (91)                   (43)              (43)

Change during the period......................          181               181                    195               195
                                                 -------------    --------------         -------------      -------------
Balance end of period.........................   $      236       $       236            $       236        $      236
                                                 =============    ==============         =============      =============

(in thousands)                                          Third Quarter Ended                     Nine Months Ended
                                                        September 30, 2004                      September 30, 2004
                                                    ===========================             ============================
                                                    Unrealized      Accumulated             Unrealized        Accumulated
                                                 Gains (Losses)           Other           Gains(Losses)             Other
                                                 on Investment    Comprehensive          on Investment      Comprehensive
                                                    Securities           Income             Securities             Income
                                                 =============    =============          =============      =============

Balance beginning of period...................   $       64       $        64            $        22        $       22

Reclassification adjustment for gains
        realized in net loss..................          (20)              (20)                   (35)              (35)

Change during the period......................           (9)               (9)                    48                48
                                                 -------------    --------------         -------------      -------------
Balance end of period.........................   $       35       $        35            $        35        $       35
                                                 =============    ==============         =============      =============
</TABLE>



<PAGE>


                       AMBASE CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

     Note 7 - Property Owned

     The Company owns two commercial office buildings in Greenwich,  Connecticut
that contain 14,500 and 38,000 square feet, respectively. The Company utilizes a
small  portion  of the  office  space in the first  building  for its  executive
offices and leases the remaining  square footage to unaffiliated  third parties.
The  buildings  and  improvements  are  carried  at  cost,  net  of  accumulated
depreciation  of $681,000 and  $433,000 at  September  30, 2004 and December 31,
2003,  respectively.  Depreciation  expense is recorded on a straight-line basis
over 39 years.  Tenant  security  deposits of $260,000 and $308,000 at September
30, 2004 and December 31, 2003, respectively, are included in other liabilities.

     The Company  earns  rental  income  under  operating  leases with  tenants.
Minimum lease rentals are recognized on a straight-line  basis over the terms of
the leases.  The cumulative  difference  between lease revenue  recognized under
this method and the contractual lease payment terms is recorded as deferred rent
receivable and is included in other assets on the  Consolidated  Balance Sheets.
Revenue from tenant  reimbursement  of common area  maintenance,  utilities  and
other  operating  expenses are  recognized  pursuant to the tenant's  lease when
earned and due from tenants.

     Included in property operating and maintenance are expenses for common area
maintenance,  utilities,  real  estate  taxes and other  reimbursable  operating
expenses,  which  have not been  reduced  by  amounts  reimbursable  by  tenants
pursuant to applicable lease agreements.




<PAGE>


                       AMBASE CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

     Note 8 - Stock Based Compensation

     The Company has adopted the disclosure requirements of Financial Accounting
Standards  Board,   Statement  of  Financial   Accounting   Standards  No.  123,
"Accounting for Stock-Based  Compensation"  ("Statement  123"), but continues to
account  for stock  compensation  using APB Opinion  25,  "Accounting  for Stock
Issued to  Employees"  ("APB 25"),  making pro forma  disclosures  of net income
(loss)  and  earnings  per  share as if the fair  value  based  method  had been
applied.  No compensation  expense,  attributable to stock incentive  plans, has
been charged to earnings.

     The Black-Scholes  option pricing model was used to estimate the fair value
of the  options at date of grant  based on various  factors  including  dividend
yield, stock price volatility, interest rates, and expected life of options.

     The  Black-Scholes   option  valuation  model  was  developed  for  use  in
estimating the fair value of traded options,  which have no vesting restrictions
and are fully  transferable.  In addition,  option  valuation models require the
input of highly  subjective  assumptions  including  the  expected  stock  price
volatility.  Because the Company's  employee stock options have  characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially affect the fair value estimate,  and
given the  changes  in the price per share of the  Company's  Common  Stock,  in
management's  opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its employee stock options.

     For  purposes of pro forma  disclosures,  the  estimated  fair value of the
options is amortized to expense over the options' vesting period. If the Company
had elected to recognize  compensation  cost for stock options based on the fair
value at date of grant for stock options,  consistent with the method prescribed
by Statement 123, net loss and net loss per share would have been changed to the
pro forma amounts indicated below.

<TABLE>
<CAPTION>
<S>                                                  <C>               <C>                     <C>              <C>
                                                                Third Quarter Ended                  Nine Months Ended
                                                    ------------------------------------     ---------------------------------
                                                      September 30,     September 30,           September 30,    September 30,
(in thousands, except per share data)                         2004              2003                    2004             2003
                                                            ======            ======                 =======          =======
Net loss:
As reported.......................................      $     (694)       $     (907)            $    (2,038)       $  (2,764)
Deduct: pro forma stock based compensation expense for
    stock options pursuant to Statement 123.......             (19)              (26)                    (59)             (78)
                                                        ----------        ----------             -----------        ---------
Pro forma.........................................      $     (713)       $     (933)            $    (2,097)       $  (2,842)
                                                        ==========        ==========             ===========        =========
Net loss per common share:
Basic - as reported...............................      $    (0.01)       $    (0.02)            $     (0.04)       $   (0.06)
Basic - pro forma.................................           (0.01)            (0.02)                  (0.04)           (0.06)
Assuming dilution - as reported...................           (0.01)            (0.02)                  (0.04)           (0.06)
Assuming dilution - pro forma.....................           (0.01)            (0.02)                  (0.04)           (0.06)
                                                        ===========       ===========            ============       ==========
</TABLE>

     Options to purchase  1,290,000 shares of common stock for the third quarter
and nine months ended  September 30, 2004, and 1,125,000  shares of common stock
for the third quarter and nine months ended  September  30, 2003,  were excluded
from the  computation  of diluted  earnings per share because these options were
antidilutive.



<PAGE>


                       AMBASE CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

     Note 9 - Pension and Savings Plans

     The  Company   sponsors  a  non-qualified   supplemental   retirement  plan
("Supplemental  Plan")  under  which only one current  executive  officer of the
Company  is a  participant.  The cost of the  Supplemental  Plan is  actuarially
determined and is accrued but not funded.

     Pension expense for the Supplemental Plan was as follows:
<TABLE>
<CAPTION>
<S>                                                           <C>               <C>             <C>             <C>
                                                                    Third Quarter Ended              Nine Months
Ended                                                  --------------------------------------- -------------------------------
                                                              September 30,     September 30,   September 30,   September 30,
(in thousands)                                                         2004              2003            2004            2003
                                                                ===========     =============   =============   =============
Service cost of current period................................  $       230     $         218   $         690     $       654
Interest cost on projected benefit obligation.................          172               161              516            483
Amortization of unrecognized losses...........................           39                51              117            153
                                                                -----------     -------------   --------------    -----------
                                                                $       441     $         430   $        1,323    $     1,290
                                                                ===========     =============   ==============    ===========
</TABLE>

     The Company  sponsors the AmBase 401(k) Savings Plan (the "Savings  Plan"),
which is a "Section 401(k) Plan" within the meaning of the Internal Revenue Code
of 1986, as amended (the "Code"). The Savings Plan permits eligible employees to
make contributions of up to 15% of salary, which are matched by the Company at a
percentage  determined  annually.  The employer  match is currently  100% of the
employee's salary eligible for deferral.  Employee  contributions to the Savings
Plan are invested at the employee's discretion, in various investment funds. The
Company's  matching  contributions are invested in the same manner as the salary
reduction  contributions.  The Company's  matching  contributions to the Savings
Plan, charged to expense, were $2,000 and $45,000 for the third quarter and nine
months ended  September 30, 2004  respectively  and $0 and $36,000 for the third
quarter and nine months ended September 30, 2003 respectively. All contributions
are subject to maximum limitations contained in the Code.



<PAGE>


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

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

     FINANCIAL CONDITION

     The  Company's  assets  at  September  30,  2004,  aggregated   $40,960,000
consisting  principally of cash and cash  equivalents  of $9,523,000  investment
securities of $11,780,000 and real estate owned of $19,083,000. At September 30,
2004,  the Company's  liabilities  aggregated  $13,462,000.  Total  stockholders
equity was $27,498,000.

     The  liability  for the  supplemental  retirement  plan (the  "Supplemental
Plan"),  which is accrued but not funded,  increased to $10,616,000 at September
30, 2004 from $9,292,000 at December 31, 2003. The  Supplemental  Plan liability
reflects the  actuarially  determined  accrued  pension costs in accordance with
GAAP.  The  increased  liability  is the result of  additional  accrued  service
vesting and interest cost on the liability.  The Supplemental  Plan liability is
further  affected by changes in  discount  rates and  experience  which could be
different from that assumed.

     For the nine months ended  September 30, 2004,  cash of $1,290,000 was used
by  operations,  including  the  payment of prior year  accruals  and  operating
expenses,  partially offset by the receipt of rental income, interest income and
investment earnings.  The cash needs of the Company for the first nine months of
2004 were satisfied by the receipt of rental income, interest income received on
investment securities and cash equivalents, and to a lesser extent the Company's
current  financial  resources.  Management  believes  that  the  Company's  cash
resources are sufficient to continue operations for 2004.

     A sale of investment securities took place at the end of the quarter ending
September  30, 2004.  The proceeds  from the sale were not  reinvested  prior to
September  30, 2004 and are included in cash and cash  equivalents  at September
30, 2004.

     For the nine months ended  September 30, 2003,  cash of $2,026,000 was used
by  operations,  including  the  payment of prior year  accruals  and  operating
expenses partially offset by the receipt of interest and rental income.

     The Company continues to evaluate a number of possible  acquisitions and is
engaged  in  the  management  of  its  assets  and  liabilities,  including  the
contingent  assets.  Discussions  and  negotiations  are ongoing with respect to
certain of these  matters.  The  Company  intends to  aggressively  contest  all
litigation and contingencies, as well as pursue all sources for contributions to
settlements.  For a  discussion  of  lawsuits  and  proceedings,  including  the
Supervisory Goodwill litigation see Part II - Item 1 - Legal Proceedings.

     The Company owns two commercial office buildings in Greenwich, Connecticut.
One building is  approximately  14,500 square feet and is leased to unaffiliated
third parties with  approximately  3,500 square feet utilized by the Company for
its executive offices.  The second building is approximately  38,000 square feet
and is leased to unaffiliated third parties.

     The Company made no purchases of common stock  pursuant to its common stock
repurchase  plan  during the first nine  months of 2004.  There are no  material
commitments for capital expenditures as of September 30, 2004. Inflation has had
no material impact on the business and operations of the Company.



<PAGE>


     Results of Operations for the Third Quarter and Nine Months ended September
30, 2004 vs. the Third Quarter and Nine Months Ended September 30, 2003

     The Company's  main source of operating  revenue is rental income earned on
real estate  owned.  The Company  also earns  non-operating  revenue  consisting
principally   of  investment   earnings  on  investment   securities   and  cash
equivalents.  The Company's management expects that operating cash needs for the
remainder of 2004 will be met  principally  by rental  income and the receipt of
non-operating  revenue  consisting  of  interest  income  earned  on  investment
securities and cash equivalents, and the Company's current financial resources.

     The  Company  recorded  a net loss of  $694,000  or  $0.01  per  share  and
$2,038,000  or $0.04  per  share for the third  quarter  and nine  months  ended
September 30, 2004,  respectively  compared with a net loss of $907,000 or $0.02
per share and  $2,764,000  or $0.06  per  share for the third  quarter  and nine
months ended September 30, 2003, respectively.

     For the third quarter and nine months ended  September 30, 2004 the Company
earned  rental  income  from  real  estate  owned  of  $561,000  and  $1,652,000
respectively,  as compared to $615,000 and  $1,846,000 for the third quarter and
nine months ended  September  30, 2003,  respectively.  The decrease in the 2004
period reflects  decreased  rental income as a result of office  vacancies as of
September, 2004.

     Compensation and benefits  increased to $1,021,000 in the third quarter and
$3,130,000 in the nine months ended September 30, 2004,  respectively,  compared
with  $982,000 and  $3,036,000 in respective  2003 periods.  The increases  were
principally  the  result  of a higher  level of  benefits  costs  and  accruals.
Included  in  compensation  and  benefits  is an  accrual  for the  Supplemental
Retirement  Plan of $441,000 and $1,323,000 for the third quarter and nine month
period  ended  September  30,  2004,  respectively,  compared  to  $430,000  and
$1,290,000, respectively, for the same 2003 periods.

     Professional and outside services decreased to $213,000 and $505,000 in the
third quarter and nine months ended September 30, 2004, compared to $270,000 and
$912,000 in the respective 2003 periods. The decreases in the 2004 third quarter
and nine month periods as compared to the respective 2003 periods is principally
due to legal fees relating to the SDG litigation proceeding during 2003.

     Property operating and maintenance  expenses were $117,000 and $344,000 for
the third  quarter and nine  months  ended  September  30,  2004,  respectively,
compared to $158,000  and $397,000 in the  respective  2003  periods.  The lower
expenses  in 2004  compared  to 2003 are due to the  ongoing  cost  controls  in
building  management.  Property operating and maintenance expenses have not been
reduced by tenant reimbursements.

     Interest  income in the third  quarter and nine months ended  September 30,
2004,  increased  to  $142,000  and  $380,000,  respectively  from  $71,000  and
$242,000,  in the respective 2003 periods. The increase is principally due to an
increased  yield on the  investments,  classified as  investments  available for
sale.

     The income tax  provisions of $30,000 and $90,000 for the third quarter and
nine months ended September 30, 2004, respectively,  and $32,000 and $94,000 for
the third quarter and nine months ended  September 30, 2003,  respectively,  are
primarily  attributable to a provision for a minimum tax on capital to the state
of Connecticut. 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>


     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, timing or results
of pending litigation,  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 occupancy rates or real estate
value;  (v) changes in  regulatory  requirements  which could affect the cost of
doing business;  (vi) general economic conditions;  (vii) changes in the rate of
inflation and the related  impact on the securities  markets;  (viii) changes in
federal and state tax laws; and (ix) 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.

     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, 2004 and December
31, 2003 with maturity dates of less than one year consist of the following:

<TABLE>
<CAPTION>
<S>                                                <C>         <C>                  <C>          <C>

                                                         2004                              2003
                                                   =================                =================
                                                   Carrying     Fair                Carrying     Fair
                                                      Value    Value                  Value     Value
(in thousands)                                     --------  -------                --------    -----

U.S. Treasury Bills.........................       $  8,552  $ 8,544                $ 17,329    $17,331
                                                   ========  =======                ========    =======

Weighted average interest rate..............          0.97%                            0.94%
                                                   ========                         ========
</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.


<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 on the definition of "disclosure
controls and  procedures"  in Rule  13a-15(e).  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.

     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 as of September 30, 2004.  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  changes  in the  Company's  internal  controls  over
financial reporting that have materially  affected,  or are reasonably likely to
materially  affect the internal  controls over  financial  reporting  during the
quarter ended September 30, 2004.

     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

     Copies of Quarterly  reports on Form 10-Q,  Annual Reports on Form 10-K and
Proxy  Statements can also be obtained  directly from the Company free of charge
by sending a request to the Company by mail as follows:

         AmBase Corporation
         100 Putnam Green, 3rd Floor
         Greenwich, CT  06830
         Attn:  Shareholder Services

     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.  Materials  filed  with the SEC may also be read or  copied  by
visiting the SEC's Public Reference Room, 450 Fifth Street, NW,  Washington,  DC
20549. Information on the operation of the Public Reference Room may be obtained
by calling 1-800-SEC-0330.

<PAGE>


     PART II - OTHER INFORMATION

     Item 1. LEGAL PROCEEDINGS

     The information  contained in Item 8 - Note 10 in AmBase's Annual Report on
Form 10-K for the year ended  December 31, 2003,  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.

     The Company is or has been a party in a number of lawsuits or  proceedings,
including the following:

     Supervisory Goodwill Litigation.  On August 31, 2004, the Court denied the
Company's Motion to Dismiss the FDIC, but granted the Company's Motion to Define
the Measure of Carteret's  Contract Damages to the extent it requested the Court
to  consider  the  size  and  value  of the  FDIC's  receivership  deficit  when
calculating  damages.  The Court  subsequently  conducted a status conference on
October 4,  2004,  and  ordered  the  Company  to submit a  proposed  litigation
time-line to the Court by October 22, 2004 which was timely submitted. The Court
ordered  the United  States and the FDIC to  respond to the  Company's  proposed
litigation  time-line  by  November  5, 2004  which was  timely  submitted,  and
scheduled a status  conference  for November 16, 2004. No assurance can be given
regarding the ultimate  outcome of the litigation.  The Court of Claims decision
in the Company's case, as well as other decisions in Winstar-related  cases, are
publicly  available  and may be relevant to the Company's  Supervisory  Goodwill
claims,  but are not  necessarily  indicative  of the  ultimate  outcome  of the
Company's actions.




<PAGE>


     Item 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits

Exhibit  31.1  Rule  13a-14(a)  Certification  of Chief  Executive  Officer
Exhibit 31.2 Rule 13a-14(a)  Certification  of Chief  Financial  Officer
Exhibit 32.1 Section 1350  Certification of Chief Executive Officer
Exhibit 32.2 Section 1350 Certification of Chief Financial Officer

     (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

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


Date:  November 10, 2004