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 June 30, 1996

                                       OR

             [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                        For the transition period from to

                          Commission file number 1-6081

                              COMFORCE CORPORATION
             (Exact name of registrant as specified in its charter)


                Delaware                                  36-2262248
      -------------------------------                  -----------------
        State or other jurisdiction                     I.R.S. Employer
      of incorporation or organization                 Identification No.


 2001 Marcus Avenue, Lake Success, New York                   11042
   --------------------------------------                   --------
   Address of principal executive offices                   Zip Code

 Registrant's telephone number, including area code:     (516) 352-3200


                                 Not Applicable
--------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last report


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 (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                    Yes X   No
                                       ---    ---
Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.


               Class                           Outstanding at July 30, 1996
    ------------------------------            -------------------------------
     Common stock, $.01 par value                        9,632,032
<PAGE>

                              COMFORCE CORPORATION


                                      INDEX




PART I         FINANCIAL INFORMATION
  Item 1.      Financial Statements (Unaudited)

               Condensed Consolidated Balance Sheets
                   June 30, 1996 and December 31, 1995

               Condensed Consolidated Statements of Operations
                   for the three and six Months ended 
                   June 30, 1996 and June 30, 1995

               Condensed Consolidated Statement of Changes in Shareholders'
                   Equity (Deficit) for the six Months ended June 30, 1996

               Condensed Consolidated Statements of Cash Flows 
                   for the six Months ended June 30, 1996 and June 30, 1995

               Notes to Condensed Consolidated Financial Statements

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



PART II        OTHER INFORMATION

  Item 6.      Exhibits and Reports on Form 8-K



SIGNATURES
<PAGE>
                         PART I - FINANCIAL INFORMATION

Item 1.     Financial Statements


                      COMFORCE CORPORATION AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                            (Unaudited in thousands)
<TABLE>
<CAPTION>

                                                                                 June 30,     December 31,
                                                                                   1996           1995
                                                                                ----------     ----------
                             ASSETS
<S>                                                                               <C>             <C> 
Current assets:
   Cash and equivalents                                                            $2,228           $649
   Restricted cash and equivalents                                                     50             -    
   Receivables including  $487 unbilled revenue at June 30, 1996
   and  $151 of unbilled revenue at  December 31, 1995                              6,709          1,754
   Prepaid expenses                                                                   119             -    
   Officer loans                                                                      331             -
   Other                                                                              218             61
   Receivable from ARTRA GROUP Incorporated                                            -           1,046
                                                                                ----------     ----------
               Total current assets                                                 9,655          3,510
                                                                                ----------     ----------

Property, plant and equipment                                                         420             97
Less accumulated depreciation and amortization                                         68              7
                                                                                ----------     ----------
                                                                                      352             90
                                                                                ----------     ----------

Other assets:
   Excess of cost over net assets acquired,
      net of accumulated amortization of $251 in 1996 and $51 in 1995              12,051          4,801
   Other                                                                               66            135
                                                                                ----------     ----------
                                                                                   12,117          4,936
                                                                                ----------     ----------
                                                                                  $22,124         $8,536
                                                                                ==========     ==========


<FN>
The accompanying notes are an integral part of the condensed consolidated financial statements.
</FN>
</TABLE>
<PAGE>
                                                           
                      COMFORCE CORPORATION AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                            (Unaudited in thousands)
<TABLE>
<CAPTION>
                                                                                 June 30,     December 31,
                                                                                   1996           1995
                                                                                ----------     ----------
                              LIABILITIES
<S>                                                                                <C>           <C> 
                          
Current liabilities: 
   Notes payable                                                                      $-            $500
   Borrowings under revolving line of credit                                        1,500             -
   Accounts payable                                                                   566             75
   Accrued expenses, including $250 due to a related party in 1995                  1,145            719
   Income taxes                                                                       265            214
   Liabilities to be assumed by ARTRA GROUP Incorporated
   and net of liabilities of discontinued operations                                1,794          3,699
                                                                                ----------     ----------
               Total current liabilities                                            5,270          5,207
                                                                                ----------     ----------


Noncurrent liabilities to be assumed by
ARTRA GROUP Incorporated                                                                -            541
                                                                                ----------     ----------

Obligations expected to be settled by the
issuance of common stock                                                              550            550
                                                                                ----------     ----------

Commitments and contingencies


                 SHAREHOLDERS' EQUITY (DEFICIT)

Series  E  convertible  preferred  stock, $.01  par  value;   10
authorized 9 issued and outstanding, liquidation 
Value of  $100 per share ($887,100)                                                     1             -
6%, Series D senior convertible preferred stock, $.01 par value;
15 authorized 7 issued and outstanding, liquidation Value of
$1,000 per share($7,002,000)                                                            1             -
Common stock, $.01 par value; authorized 10,000 shares;
   issued 9,632 shares in 1996 and 9,309 shares in 1995                                96             92
Additional paid-in capital                                                         15,754         95,993
Accumulated deficit                                                                    -         (93,847)
Retained earnings since January 1, 1996                                               452             -
                                                                                ----------     ----------
                                                                                   16,304          2,238
                                                                                ----------     ----------
                                                                                  $22,124         $8,536
                                                                                ==========     ==========



<FN>
The accompanying  notes are an integral part of the condensed consolidated financial statements.
</FN>
</TABLE>
<PAGE>
                      COMFORCE CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      (In thousands, except per share data)
<TABLE>
<CAPTION>
                                                               Three Months            Six Months 
                                                              Ended June 30,          Ended June 30,
                                                           -------------------     --------------------
                                                              1996        1995        1996        1995
                                                           --------    --------    --------    --------
<S>                                                        <C>         <C>         <C>         <C>      
Net sales                                                  $  9,893    $   --      $ 13,158    $   --   
                                                           --------    --------    --------    --------

Costs and expenses:
   Cost of goods sold                                         8,424        --        11,002        --
   Selling, general and administrative                          731         144       1,173         227
   Depreciation and amortization                                151        --           228        --
                                                           --------    --------    --------    --------
                                                              9,306         144      12,403         227
                                                           --------    --------    --------    --------

Operating income (loss)                                         587        (144)        755        (227)
                                                           --------    --------    --------    --------

Other income (expense):
   Interest expense                                             (50)        (74)        (51)       (131)
   Other income, net                                             13          26          16          26
                                                           --------    --------    --------    --------
                                                                (37)        (48)        (35)       (105)
                                                           --------    --------    --------    --------

Earnings (loss) from continuing operations
   before income taxes                                          550        (192)        720        (332)
Provision for income taxes                                     (198)       --          (268)       --
                                                           --------    --------    --------    --------
Earnnings (loss) from continuing operations                     352        (192)        452        (332)
                                                           --------    --------    --------    --------
Discontinued operations
Earnings from operations                                       --       (14,679)       --       (14,787)
Provision for income taxes                                     --            (1)       --            (3)
                                                           --------    --------    --------    --------
                                                                                              
Loss from discontinued operations                              --       (14,680)       --       (14,790)
                                                           --------    --------    --------    --------

Earnings(loss) before extraordinary credit                      352     (14,872)        452     (15,122)
Extraordinary credit,
    net discharge of indebtedness                              --          --          --         6,657
                                                           --------    --------    --------    --------
Net earnings (loss)                                        $    352    ($14,872)   $    452    ($ 8,465)
                                                           ========    ========    ========    ========

Earnings (loss) per share:
 Earnings (loss) from continuing operations                $   0.03    ($  0.06)   $   0.03    ($  0.10)
loss from discontinued operations                              --         (4.50)       --         (4.54)
                                                           --------    --------    --------    --------
Earnings (loss) before extodinary credit                       0.03       (4.56)       0.03       (4.64)
Extrodinary credit                                             --          --          --          2.04
                                                           --------    --------    --------    --------
     Net earnings (loss)                                   $   0.03    ($  4.56)   $   0.03    ($  2.60)
                                                           ========    ========    ========    ========

Weighted average number of shares of common stock  
   and common stock equivalents outstanding                  13,921       3,163      13,819       3,257
                                                           ========    ========    ========    ========


<FN>
The accompanying notes are an integral part of the condensed consolidated financial statements.
</FN>
</TABLE>
<PAGE>
                      COMFORCE CORPORATION AND SUBSIDIARIES
  CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)
                   (Unaudited in thousands, except share data)

<TABLE>
<CAPTION>
                                                                                                            Retained           
                                                      Series E          Series D                            Earnings       Total 
                                  Common Stock     Prefered Stock    Prefered Stock  Additional              Since     Shareholders'
                                ----------------  ----------------- ---------------   Paid-in  Accumulated  January 1,     Equity
                                 Shares  Dollars   Shares  Dollars  Shares  Dollars   Capital   (Deficit)     1996       (Deficit)
                                -------  -------  -------  -------  ------- -------  --------  -----------  ---------    --------- 
<S>                             <C>         <C>       <C>       <C>   <C>        <C> <C>         <C>             <C>      <C>
Balance at December 31, 1995    9,309,198   $92         -       -        -        -   $95,993    ($93,847)                $2,238
 Quasi -Reorganization 
  as of January 1, 1996                -     -          -       -        -        -  ($93,847)    $93,847
 Net earnings                          -     -          -       -        -        -        -           -         $452        452
 Exercise of stock options          4,500     1         -       -        -        -        22          -           -          23
 Exercise of stock warrants       318,334     3         -       -        -        -       999          -           -       1,002
 Issuance of Series E
  convertible prefered stock           -     -       8,871       1       -        -     4,635          -           -       4,636
 Issuance of Series D senior 
  convertible preferred stock          -     -          -       -     7,002       1     6,415          -           -       6,416
 Liabilities assumed by ARTRA          -     -          -       -        -        -     1,537          -           -       1,537
                                --------   ----   -------    -----   ------ -------  --------    --------   ---------    -------
                                                                                                      
Balance at June 30, 1996        9,632,032   $96      8,871      $1    7,002      $1   $15,754          $0        $452    $16,304
                                =========  ====   ========    ====   ====== =======  ========    ========   =========    ======= 

<FN>
The accompanying notes are an integral part of the condensed consolidated financial statements.
</FN>
</TABLE>
<PAGE>

                     COMFORCE CORPORATION AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (Unaudited in thousands)

<TABLE>
<CAPTION>

                                                                         Six Months Ended 
                                                                             June 30,
                                                                       --------------------
                                                                         1996        1995
                                                                       --------    --------
<S>                                                                    <C>         <C>      
Net cash flows used by operating activities                            ($ 3,318)   ($ 1,377)
                                                                       --------    --------
Cash flows from investing activities:
   COMFORCE Global and Williams direct acquisition costs                    (31)       --   
   Acquisition of Williams Telecommunications                            (2,074)       --
   Acquisition of RRA                                                    (5,345)       --
   Officer loans                                                           (331)       --   
   Payment of liabilites with restricted cash                              --           550
   Additions to property, plant and equipment                              (323)        (21)
   Retail fixtures                                                         --          (609)
                                                                       --------    --------
Net cash flows (used by) from  investing activities                      (8,104)        (80)
                                                                       --------    --------

Cash flows from financing activities:
   Proceeds from revolving line of credit                                 1,500       1,475
   Reduction of long-term debt                                             --          (750)
   Repayment of Note                                                       (500)       --
   Issuance of Preferred Stock Series E                                   4,636        -- 
   Issuance of Preferred Stock Series D                                   6,416        --
   Proceeds from stock warrants                                             999        --
   Other                                                                   --             1
                                                                       --------    --------
Net cash flows from financing activities                                 13,051         726
                                                                       --------    --------

Increase (decrease) in cash and cash equivalents                          1,629        (731)
Cash and equivalents, beginning of period                                   649         783
                                                                       --------    --------
Cash and equivalents, end of period                                    $  2,278    $     52
                                                                       ========    ========


Supplemental cash flow information: Cash paid during the period for:
      Interest                                                         $     51    $     80
      Income taxes paid, net                                               --             3

Supplemental schedule of noncash investing and financing activities:
   Common stock issued as consideration for debt restructuring             --           378

Net change in ARTRA receivables and liabilites                            1,537        --


<FN>
The  accompanying  notes  are an  integral  part of the  condensed  consolidated financial statements.
</FN>
</TABLE>
<PAGE>
                      COMFORCE CORPORATION AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.   BASIS OF PRESENTATION

The  accompanying   condensed  consolidated  financial  statements  of  COMFORCE
Corporation  ("COMFORCE"  or  the  "Company"),  formerly  The  Lori  Corporation
("Lori"),  are  presented  on a going  concern  basis,  which  contemplates  the
realization of assets and the  satisfaction  of liabilities in the normal course
of  business.  The  Company  currently  operates  in one  industry  segment as a
provider of  telecommunications  and computer  technical staffing and consulting
services  worldwide.  As  discussed in Note 4, in  September  1995,  the Company
adopted  a  plan  to  discontinue  its  jewelry  business  ("Jewelry  Business")
conducted by its two  wholly-owned  subsidiaries  Lawrence  Jewelry  Corporation
("Lawrence") and Rosecraft, Inc.("Rosecraft").

Effective  January 1, 1996 the Company effected a  quasi-reorganization  through
the  application of $93,847,000 of its  $95,993,000  Additional  Paid in Capital
account  to  eliminate  its  Accumulated   Deficit.   Under  generally  accepted
accounting principles, when a business reaches a turnaround point and profitable
operations seem likely, a  quasi-reorganization  may be appropriate to eliminate
the accumulated deficit from past unprofitable  operations.  The Company's Board
decided  to  effect  a  quasi-reorganization  given  that the  Company  achieved
profitability  following  its entry into the  technical  staffing  business  and
discontinuation of its unprofitable Jewelry Business.  The Company's Accumulated
Deficit at December 31, 1995 is primarily related to the discontinued operations
and is not, in management's view,  reflective of the Company's current financial
condition.

At December 31, 1994, ARTRA GROUP Incorporated ("ARTRA"), a public company whose
shares  are  traded  on  the  New  York  Stock  Exchange,   owned,  through  its
wholly-owned subsidiary Fill-Mor Holding, Inc. ("Fill-Mor"), approximately 62.9%
of the common stock and all of the  outstanding  preferred stock of the Company.
At June 30, 1996, ARTRA owned approximately 25% of the Company's stock.

On October 17, 1995 Lori  acquired one hundred  percent of the capital  stock of
COMFORCE Global Inc.  ("COMFORCE  Global"),  formerly  Spectrum Global Services,
Inc,  d/b/a YIELD  Global,  a wholly owned  subsidiary  of Spectrum  Information
Technologies,  Inc.  ("Spectrum").  In  connection  with the  re-focus of Lori's
business, Lori changed its name to COMFORCE Corporation. See Note 2.

As discussed in Note 2, on May 10, 1996, the Company  purchased all of the stock
of Project  Staffing Support Team, Inc. and  substantially  all of the assets of
RRA Inc. and Datatech Technical Services, Inc. (collectively,  "RRA"). RRA is in
the business of providing contract employees to other businesses.

These condensed  consolidated  financial  statements are presented in accordance
with the  requirements  of Form 10-Q and  consequently  do not  include  all the
disclosures  required in the Company's annual report on Form 10-K.  Accordingly,
the Company's  Annual Report on Form 10-K for the fiscal year ended December 31,
1995, as filed with the  Securities and Exchange  Commission,  should be read in
conjunction  with  the  accompanying  consolidated  financial  statements.   The
condensed  consolidated  balance  sheet as of December 31, 1995 was derived from
the audited consolidated  financial statements in the Company's Annual Report on
Form 10-K.

Reported  interim results of operations are based in part on estimates which may
be subject to year-end  adjustments.  In addition,  these  quarterly  results of
operations are not necessarily indicative of those expected for the year.

2.       CERTAIN ACQUISITIONS

On September 11, 1995, Lori signed a stock purchase  agreement to participate in
the acquisition of one hundred percent of the capital stock of COMFORCE  Global.
On October 17,  1995,  this  transaction  was  completed.  The price paid by the
Company  for the  COMFORCE  Global  stock  and  related  acquisition  costs  was
approximately $6.4 million, net of cash acquired.  This consideration  consisted
of cash to the  seller of  approximately  $5.1  million,  fees of  approximately
<PAGE>

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)


$700,000,  including a fee of $500,000 to a related party, and 500,000 shares of
the  Company's  Common  Stock  issued  as  consideration  for  various  fees and
guarantees  associated with the transaction.  Additionally,  in conjunction with
the COMFORCE Global  acquisition,  ARTRA has agreed to assume  substantially all
pre-existing  Lori  liabilities  and indemnify  COMFORCE in the event any future
liabilities  arise concerning  pre-existing  environmental  matters and business
related litigation.

COMFORCE  Global provides  telecommunications  and computer  technical  staffing
services  worldwide to Fortune 500 companies and maintains an extensive,  global
database of technical  specialists  with an emphasis on wireless  communications
capability. The acquisition of COMFORCE Global was accounted for by the purchase
method and,  accordingly,  the assets and  liabilities  of COMFORCE  Global were
included in the Company's  financial  statements at their  estimated fair market
value at the date of acquisition and COMFORCE  Global's  operations are included
in the  Company's  statement of  operations  from the date of  acquisition.  The
excess  purchase  price  over the fair  value of  COMFORCE  Global's  net assets
acquired  (goodwill) of $4,852,000 is being amortized on a  straight-line  basis
over 20 years.

The  acquisition  of COMFORCE was funded  principally  by private  placements of
approximately  1,950,000 shares of the Company's Common Stock at $3.00 per share
plus  detachable  warrants  to  purchase  approximately  970,000  shares  of the
Company's  Common Stock at $3.75 per share.  The warrants expire five years from
the date of issue.

On  March  3,  1996,  the  Company  acquired  all  of  the  assets  of  Williams
Communications   Services,   Inc.   ("Williams),    a   regional   provider   of
telecommunications  and technical staffing services.  The purchase price for the
assets of Williams  was $2 million with a four year  contingent  payout based on
earnings of  Williams.  The value of the  contingent  payouts will not exceed $2
million, for a total purchase price not to exceed $4 million. The acquisition of
Williams was accounted for by the purchase  method and,  accordingly,  Williams'
operations are included in the Company's  statement of operations  from the date
of  acquisition.  The excess purchase price over the fair value of Williams' net
assets  acquired  (goodwill)  of  $2,000,000  plus  related  direct costs of the
acquisition  of $73,000 are being  amortized  on a  straight-line  basis over 20
years.

On May 10, 1996,  the Company  acquired RRA for an aggregate  purchase  price of
$5,000,000,  plus contingent  payments  payable over three years in an aggregate
amount not to exceed  $750,000.  The acquisition of RRA was accounted for by the
purchase method and,  accordingly,  RRA operations are included in the Company's
statement of operations from the date of acquisition.  The excess purchase price
over the fair value of RRA net assets  acquired  (goodwill) of  $5,410,000  plus
related  acquisition costs, are being amortized on a straight-line basis over 20
years.  RRA  is in  the  business  of  providing  contract  employees  to  other
businesses.  The  Company's  headquarters  are  located in Tempe,  Arizona.  The
acquisition of RRA enables the Company, through its COMFORCE Technical Services,
Inc. subsidiary, to provide specialists for supplemental staffing assignments as
well  as  outsourcing  and   vendor-on-premises   programs,   primarily  in  the
electronics,  avionics,  telecommunications  and information technology business
sectors.
<PAGE>

         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)



The  following  unaudited  pro  forma  condensed   consolidated   statements  of
operations  for the three and six months  ended June 30,  1996 and June 30, 1995
present the Company's  results of operations as if the  acquisition  of COMFORCE
Global,  Williams,  and RRA and the related revolving line of credit and private
placement of the Company's  Common Stock and Series D Preferred Stock and Series
E Preferred Stock had been consummated as of January 1, 1995.

       UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

                    For the three months ended June 30, 1996
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                          Pro Forma
                                                        Historical         RRA (A)        Adjustments         Pro Forma
                                                       -------------    -------------    -------------    -------------
<S>                                                      <C>            <C>                     <C>          <C>       
Revenues                                                 $    9,893     $       7,649                        $   17,542
                                                         ----------     -------------                        ----------

Operating costs and expenses:
     Cost of revenues                                         8,424             6,670                            15,094
     Other operating costs and expenses                         882               683           $ 43 (B)          1,608
                                                         ----------     -------------    -----------         ----------
                                                              9,306             7,353             43             16,702
                                                         ----------     -------------    -----------         ----------
Operating earnings (loss)                                       587               296            (43)               840
                                                         ----------     -------------    -----------         ----------

Other income net                                                 13                                                  13
Interest and other non-operating expenses                       (50)              (14)            -                 (64)
                                                         ----------     -------------    -----------         ----------
                                                                (37)              (14)            -                 (51)
                                                         ----------     -------------    -----------         ----------
                                                                                        
Earnings (loss) from continuing operations
     before income taxes                                        550               282            (43)               789
(Provision) credit for income taxes                            (198)             (113)            17               (294)
                                                         ----------       -----------    -----------         ----------
Income from continuing operations                        $      352       $       169           $(26)        $      495
                                                         ==========       ===========    ===========         ========== 
                                                                                                          
Income per share from continuing operations              $      .03                                           $     .04      
                                                         ==========                                           ========= 

Weighted average shares outstanding (E)                      13,921                                              13,921 
                                                         ==========                                           ========= 
</TABLE>
<PAGE>

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)

       UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

                     For the three months ended June 30, 1995
                                 (In thousands)

<TABLE>                                                          
<CAPTION>                                                      
                                        Lori      COMFORCE                                  Pro Forma   
                                     Historical   Global (A)    Williams(A)       RRA (A)   Adjustments           Pro Forma
                                     ----------  ------------   ----------   ------------  ------------         ------------
<S>                                  <C>         <C>            <C>          <C>          <C>            <C>    <C>         
Revenues                             $       -   $      2,963   $    1,026   $     12,969                       $     16,958
                                     ----------  ------------   ----------   ------------                       ------------

Operating costs and expenses:
     Cost of Revenues                                   2,208          727         11,985                             14,830
     Other operating costs and
        expenses                            144           484           68            713           139   (B)          1,548
                                     ----------  ------------   ----------   ------------  ------------         ------------
                                            144         2,692          795         12,608           139               16,378
                                     ----------  ------------   ----------   ------------  ------------         ------------
Operating earnings (loss)                  (144)          271          231            361          (139)                 580 
                                     ----------  ------------   ----------   ------------  ------------         ------------
                                       
Spectrum corporate management
     fees (D)                                            (357)                                                          (357)
Other Income                                 26             2                           3                                 31
Interest and other non-operating
     expenses                               (74)                                      (44)          (40)  (C)           (158)
                                     ----------  ------------   ----------   ------------  ------------         ------------
                                            (51)         (355)                        (41)          (40)                (484)
                                     ----------  ------------   ----------   ------------  ------------         ------------
                                     
Earnings (loss) from continuing 
     operations before income taxes        (192)          (84)         231            320          (179)                  96 
(Provision) credit for income taxes          (1)           (2)         (92)          (128)          179                   -
                                     ----------  ------------   ----------   ------------  ------------         ------------

Income (loss) from continuing
     operations                      $     (193) $        (86) $       139   $        192  $         -          $         96 
                                     ==========  ============  ===========   ============  ============         ============
Loss per share from continuing
     operations                      $     (.06)                                                                $       (.01)
                                     ==========                                                                 ============
Weighted average shares
     outstanding (E)                      3,257                                                                        9,790
                                     ==========                                                                 ============  
</TABLE>
<PAGE>

         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)

Pro forma  adjustments  to the  unaudited  condensed  consolidated  statement of
operations:

     A)   The pro forma data  presented  for  COMFORCE  Global's  and  Williams'
          operations is for the periods prior to their  acquisitions  (i.e.,  in
          the case of COMFORCE  Global,  the period  from April 1, 1995  through
          June 30,  1995,  which  precedes the October 17, 1995  acquisition  of
          COMFORCE  Global;  in the case of  Williams,  the period from April 1,
          1995  through  June  30,  1995,   which  precedes the  March  3,  1996
          acquisition  of  Williams;  and, in the case of RRA,  the periods from
          April 1, 1996 through May 10, 1996 and from April 1, 1995 through June
          30, 1995, which precede the May 10, 1996 acquisition of RRA).

     B)   Amortization of intangibles arising from the COMFORCE Global, Williams
          and RRA  acquisitions. The table below reflects where the amortization
          of intangibles have been recorded.

         
                                          
                                      Three Months Three Months
                                       June 1996    June 1995
                                       ---------    ---------
          Historical COMFORCE               $137
          Historical Global                            $ 41
          Williams
          RRA    
          Pro forma Adjustment               43         139
                                           ----        ----
          Adjusted Pro forma per
          Financial statement              $180        $180
                                           ====        ====


C)   Interest expense incurred for the purchase of Williams assuming  $1,900,000
     outstanding under the line of credit at an interest rate of 8.5%.

D)   Corporate  management fees from COMFORCE  Global's former parent,  Spectrum
     Information Technologies,  Inc. The amount of these management fees may not
     be  representative  of costs  incurred by COMFORCE  Global on a stand alone
     basis.

E)   Pro  forma  weighted  average  shares  outstanding  includes  shares of the
     Company's  Common  Stock  issued in the private  placement  that funded the
     COMFORCE  Global  transaction,  Including  100,000  shares  issued to a non
     related  party , and  150,000  shares  issued to Peter  Harvey  then a Vice
     President of the Company for guaranteeing the payment of the purchase price
     to the seller and other  guarantees  associated  with the  COMFORCE  Global
     acquisition,  shares issued to certain  individuals to manage the Company's
     entry into and development of the telecommunications and computer technical
     staffing  services  business,  and  Series D and Series E  Preferred  Stock
     issued in conjunction with the purchase of RRA.

<PAGE>

         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)

       UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

                     For the six  months ended June 30, 1996
                                 (In thousands)

<TABLE>                                                          
<CAPTION>                                                      
                                                                               Pro Forma   
                                     Historical    Williams(A)     RRA (A)    Adjustments           Pro Forma
                                     ----------    ----------   ------------  ------------         ------------
<S>                                  <C>           <C>          <C>          <C>            <C>    <C>         
Revenues                             $   13,158    $      654   $     22,786                       $     36,598
                                     ----------    ----------   ------------                       ------------

Operating costs and expenses:
     Cost of Revenues                    11,002           281         20,762                             32,045
     Other operating costs and
        expenses                          1,401            38          1,491           154   (B)          3,084
                                     ----------    ----------   ------------  ------------         ------------
                                         12,403           319         22,253           154               35,129
                                     ----------    ----------   ------------  ------------         ------------
Operating earnings (loss)                   755           335            533          (154)               1,469 
                                     ----------    ----------   ------------  ------------         ------------
                                       
Other Income                                 16                                                              16
Interest and other non-operating
     expenses                               (51)                         (36)          (30)  (C)           (117)
                                     ----------    ----------   ------------  ------------         ------------
                                            (35)                         (36)          (30)                (101)
                                     ----------    ----------   ------------  ------------         ------------
                                     
Earnings (loss) from continuing 
     operations before income taxes         720           335            497          (184)               1,368 
(Provision) credit for income taxes        (268)         (265)          (199)          131                 (601)
                                     ----------    ----------   ------------  ------------         ------------

Income (loss) from continuing
     operations                      $      452   $        70   $        298  $        (53)        $        767 
                                     ==========   ===========   ============  ============         ============
Loss per share from continuing
     operations                      $      .03                                                    $        .06 
                                     ==========                                                    ============
Weighted average shares
     outstanding (F)                     13,819                                                          13,819
                                     ==========                                                    ============  
</TABLE>

<PAGE>

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)

       UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

                     For the six months ended June 30, 1995
                                 (In thousands)

<TABLE>                                                          
<CAPTION>                                                      
                                        Lori      COMFORCE                                  Pro Forma   
                                     Historical   Global (A)    Williams(A)     RRA (A)    Adjustments           Pro Forma
                                     ----------  ------------   ----------   ------------  ------------         ------------
<S>                                  <C>         <C>            <C>          <C>          <C>            <C>    <C>         
Revenues                             $       -   $      5,653   $    1,678   $     24,424                       $     31,755
                                     ----------  ------------   ----------   ------------                       ------------

Operating costs and expenses:
     Cost of Revenues                                   4,183        1,227         22,618                             28,028
     Stock compensation (E)                                                                       3,425                3,425
     Other operating costs and
        expenses                            227           913          131          1,348           278   (B)          2,897
                                     ----------  ------------   ----------   ------------  ------------         ------------
                                            227         5,096        1,358         23,966         3,703               34,350
                                     ----------  ------------   ----------   ------------  ------------         ------------
Operating earnings (loss)                  (227)          557          320            458        (3,703)              (2,595)
                                     ----------  ------------   ----------   ------------  ------------         ------------
                                       
Spectrum corporate management
     fees (D)                                            (625)                                                          (625)
Other Income                                 26             2                           3                                 31
Interest and other non-operating
     expenses                              (131)                                      (60)          (80)  (C)           (271)
                                     ----------  ------------   ----------   ------------  ------------         ------------
                                           (105)         (623)                        (57)          (80)                (865)
                                     ----------  ------------   ----------   ------------  ------------         ------------
                                     
Earnings (loss) from continuing 
     operations before income taxes        (332)          (66)         320            401        (3,783)              (3,460)
(Provision) credit for income taxes          (3)          (19)        (128)          (160)        1,513                1,203
                                     ----------  ------------   ----------   ------------  ------------         ------------

Income (loss) from continuing
     operations                      $     (335) $        (85) $       192   $        241  $     (2,270)        $     (2,257)
                                     ==========  ============  ===========   ============  ============         ============
Loss per share from continuing
     operations                      $     (.07)                                                                $       (.23)
                                     ==========                                                                 ============
Weighted average shares
     outstanding (F)                      3,257                                                                        9,790
                                     ==========                                                                 ============  
</TABLE>

<PAGE>

         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)


Pro forma  adjustments  to the  unaudited  condensed  consolidated  statement of
operations:

     A)   The pro forma data  presented  for  COMFORCE  Global's  and  Williams'
          operations is for the periods prior to their  acquisitions  (i.e.,  in
          the case of COMFORCE  Global,  the period from January 1, 1995 through
          June 30,  1995,  which  precedes the October 17, 1995  acquisition  of
          COMFORCE Global; in the case of Williams,  the periods from January 1,
          1996  through  March 3, 1996 and from January 1, 1995 through June 30,
          1995, which precede the March 3, 1996 acquisition of Williams; and, in
          the case of RRA, the periods from January 1, 1996 through May 10, 1996
          and from January 1, 1995 through June 30, 1995,  which precede the May
          10, 1996 acquisition of RRA).


     B)   Amortization of intangibles arising from the COMFORCE Global, Williams
          and RRA  acquisition.  The table below reflects where the amortization
          of intangibles have been recorded

      
                                        Six Months     Six Months
                                        June 1996      June 1995
                                        ---------      ---------
                                            
             Historical COMFORCE        $    206       
             Historical Global                          $     82
             Williams
             RRA      
             Pro forma Adjustment            154             278
                                        --------        --------
             Adjusted Pro forma per
             Financial statement        $    360        $    360
                                        ========        ========


C)   To record  interest  expense  incurred for the purchase of Williams for the
     pro forma six months ended June 30, 1995 and for the period January 1, 1996
     through March 3, 1996.  Interest expense represents interest on the line of
     credit  assuming all  $1,900,000 was  outstanding  for the six months ended
     June 30, 1995 and for the period  January 1, 1996 through  March 3, 1996 at
     the interest rate in effect of 8.5%.

D)   Represents a non-recurring  compensation  charge related to the issuance of
     the 35% common  stock  interest  in the Company to certain  individuals  to
     manage the Company's entry into and  development of the  telecommunications
     and computer technical staffing business.

E)   Corporate  management fees from COMFORCE  Global's former parent,  Spectrum
     Information Technologies,  Inc. The amount of these management fees may not
     be  representative  of costs  incurred by COMFORCE  Global on a stand alone
     basis.

F)   Pro  forma  weighted  average  shares  outstanding  includes  shares of the
     Company's  Common  Stock  issued in the private  placement  that funded the
     COMFORCE  Global  transaction,  Including  100,000  shares  issued to a non
     related  party , and  150,000  shares  issued to Peter  Harvey  then a Vice
     President of the Company for guaranteeing the payment of the purchase price
     to the seller and other  guarantees  associated  with the  COMFORCE  Global
     acquisition , shares issued to certain  individuals to manage the Company's
     entry into and development of the telecommunications and computer technical
     staffing  services  business,  and  Series D and Series E  Preferred  Stock
     issued in conjunction with the purchase of RRA.

<PAGE>

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)


3.       NOTES PAYABLE

Notes payable and long-term debt (in thousands) consists of:
<TABLE>
<CAPTION>
                                                                       
                                                                              June 30,      December 31,
                                                                                1996             1995
                                                                              -------          -------
    
   <S>                                                                        <C>              <C>
   Notes payable
       Amounts due to a former related party,                                       
       interest at the prime rate plus 1%                                     $    --          $   750

       Other, interest at 15%                                                     263            1,736

       Note payable to a bank under a revolving  line of credit,  due in        1,500               --
       March 1997,  with  interest  payable  monthly at the bank's prime
       rate plus a varying  percentage not to exceed 1% based on certain
       financial criteria. At June 30 the Company was 
       paying prime (8.25%) plus 1%.                                            

   Accounts Receivable credit facility, discontinued operations                    --            1,535

   Less:
       Liabilities to be assumed by ARTRA (see Note 7)                           (263)          (1,986)
       Liabilities included with discontinued operations                           --           (1,535)  
                                                                              -------          -------
                                                                              $ 1,500          $   500
                                                                              =======          =======
</TABLE>



The revolving line of credit  agreement  allowing for borrowings up to a maximum
of $2,250,000  replaces the $800,000 revolving line of credit which was in place
at  December  31,  1995.  Borrowings  against  the  line can not  exceed  80% of
acceptable  receivables  as  defined.  The note is  collateralized  by  accounts
receivable and other assets of COMFORCE  Global and guaranteed by COMFORCE.  The
fair  value of the  Company's  notes  payable is  estimated  based on the quoted
market  prices of the same or similar  issues or on the current rates offered to
the Company for notes of the same remaining maturity.

See Note 10 for discussion of the Company's new $10,000,000 credit facility.
<PAGE>

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)


ARTRA,  Fill-Mor,  Lori and Lori's fashion costume jewelry  subsidiaries entered
into an agreement with Lori's bank lender to settle obligations due the bank. As
partial  consideration  for the debt settlement  agreement,  the bank received a
$750,000 Lori note payable due March 31, 1995.

The $750,000 note due the bank was paid and the remaining  indebtedness  of Lori
and Fill-Mor was discharged,  resulting in an additional  extraordinary  gain to
Lori of  $6,657,000  in 1995.  The  $750,000  note  payment  was funded with the
proceeds of a $850,000  short-term  loan from a former  director of the Company.
The loan provided for interest at the prime rate plus 1%. As  consideration  for
assisting with the debt  restructuring,  the former  director  received  150,000
shares of the Company's  Common Stock valued at $337,500 ($2.25 per share) based
upon the closing  market value on March 30, 1995.  The  principal  amount of the
loan was reduced $750,000 at July 31, 1995. The remaining loan principal was not
repaid on its scheduled  maturity  date of July 31, 1995.  Per terms of the loan
agreement,  the former director  received an additional  50,000 of the Company's
Common Stock as  compensation  for the non-payment of the loan at its originally
scheduled  maturity date. At December 31, 1995, the $750,000 note was classified
in the  Company's  consolidated  balance sheet as  liabilities  to be assumed by
ARTRA.  The  loan was paid in full in  March  1996 by ARTRA as  required  by the
Assumption Agreement discussed in Note 7.

During the second and third  quarters  of 1995,  Lori  entered  into a series of
agreements with certain  unaffiliated lenders that provided for short-term loans
with interest at 15%. As additional  compensation  certain  lenders  received an
aggregate of 91,176  shares of the  Company's  Common Stock and certain  lenders
received  warrants to purchase an aggregate of 195,000  shares of the  Company's
Common Stock at prices ranging from $2.00 per share to $2.50 per share, the fair
market value at the dates of grant. The warrants expire five years from the date
of issue.  The proceeds from these loans were used to fund the  September,  1995
$500,000  down payment on the COMFORCE  Global  acquisition,  with the remainder
used to fund working capital requirements of the Company's  discontinued Jewelry
Business.  At June 30, 1996 and  December  31,  1995,  short-term  loans with an
aggregate  principal  balance  of  $886,000  and  $1,236,000  respectively  were
classified in the Company's  consolidated  balance  sheet as  liabilities  to be
assumed by ARTRA.  In the second quarter of 1996, the loans were paid in full by
ARTRA as required by the Assumption Agreement discussed in Note 7.

In August  1995,  Lori  obtained  a credit  facility  for the  factoring  of the
accounts  receivable of its discontinued  Jewelry Business.  The credit facility
provides  for  advances of 80% of  receivables  assigned,  less  allowances  for
markdowns and other  merchandise  credits.  The factoring  charge,  a minimum of
1.75%  of  the  receivables  assigned,  increases  on a  sliding  scale  if  the
receivables  assigned are not  collected  within 45 days.  Borrowings  under the
credit facility are  collateralized  by the accounts  receivable,  inventory and
equipment  of Lori's  discontinued  fashion  costume  jewelry  subsidiaries  and
guaranteed by Lori. At June 30, 1996,  due to the sale of the Jewelry  Business,
this credit facility is no longer available.  At December 31, 1995,  outstanding
borrowings  under  this  credit  facility  of  $1,535,000,  along with other net
liabilities  of  the  discontinued  Jewelry  Business,  were  classified  in the
Company's  consolidated  balance sheet as liabilities to be assumed by ARTRA and
net liabilities of the discontinued  Jewelry  Business.  At June 30, 1996, there
were no outstanding borrowings under this credit facility.
<PAGE>

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)


4.       EQUITY

In March 1996,  4,500 stock options were exercised at an average price of $5 per
share.

In April 1996,  301,667 warrants were exercised at an average price of $3.12 per
share.

In April 1996, in  conjunction  with the purchase of RRA, the Company sold 8,871
shares of  Series E  Preferred  Stock at a  selling  price of $550 per share for
8,470 shares and $750 per share for 401 shares. Each share of Series E Preferred
Stock will be  automatically  converted  into 100 shares of Common  Stock on the
date the Company's  Certificate of  Incorporation is amended so that the Company
has a sufficient  number of  authorized  and unissued  shares of Common Stock to
effect the  conversion  and any accrued and unpaid  dividends  have been paid in
full.  Holders of shares of Series E Preferred  Stock are  entitled to dividends
equal to those declared on the Common Stock,  or if no dividends are declared on
the Common  Stock,  nominal  cumulative  dividends  payable only if the Series E
Preferred  Stock fails to be  converted  into Common Stock by September 1, 1996.
The Series E  Preferred  Stock has a  liquidation  preference  of $100 per share
($887,100 in the aggregate for all outstanding shares).

In May 1996,  the Company  sold 7,002  shares of Series D  Preferred  Stock at a
selling  price of  $1,000  per  share.  The  holder  of each  share of  Series D
Preferred Stock will have the right to convert such shares into 83.33 fully paid
and nonassessable  shares of Common Stock at any time subsequent to the date the
Company's  Certificate of  Incorporation  is amended so that the Corporation has
sufficient  number  of  authorized  and  unissued  Common  Stock to  effect  the
conversion.  Holders of the shares of Series D Preferred  Stock are  entitled to
cumulative dividends of 6% per annum, payable quarterly in cash on the first day
of February, May, August and November in each year. The Series D Preferred Stock
has a liquidation  preference of $1,000 per share  ($7,002,000  in the aggregate
for all outstanding shares).

5.       EARNINGS PER SHARE

Earnings  (loss) per share is computed by dividing  net  earnings  (loss) by the
weighted  average number of shares of Common Stock and Common Stock  equivalents
(stock  options and warrants),  unless  anti-dilutive,  outstanding  during each
period.  Fully diluted  earnings per share are not presented since the result is
equivalent to primary earnings per share.

6.       INCOME TAXES

The 1995  extraordinary  credit  represents  a net gain from  discharge  of bank
indebtedness.  No income tax expense is  reflected  in the  Company's  financial
statements resulting from the extraordinary credit due to the utilization of tax
loss  carryforwards.  In 1995, the Company issued a significant number of shares
of its Common Stock in  conjunction  with the COMFORCE  Global  acquisition  and
certain related transactions.  Accordingly,  the Company is currently subject to
significant limitations regarding the utilization of its Federal income tax loss
carryforwards.

7.       LIABILITIES TO BE ASSUMED BY ARTRA GROUP INCORPORATED AND NET
         LIABILITIES OF DISCONTINUED OPERATIONS

Under the  Assumpiton  Agreement  between  the  parties  in  October,  1995 (the
"Assumption  Agreement")  entered into in  connection  with the COMFORCE  Global
acquisition  (see  Note  2),  ARTRA  has  agreed  to  assume  substantially  all
pre-existing  Lori  liabilities  and indemnify  COMFORCE in the event any future
liabilities  arise concerning  pre-existing  environmental  matters and business
related litigation.  Additionally,  ARTRA agreed to assume all of the assets and
liabilities of the Company's discontinued Jewelry Business. In April 1996, ARTRA
sold the business and certain assets of the Jewelry Business.
<PAGE>

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)


At June 30, 1996 and December 31, 1995,  liabilities  to be assumed by ARTRA and
net liabilities of the discontinued Jewelry Business (in thousands) consist of:


                                                     June 30       December 31
Current:                                               1996             1995
                                                     -------         --------
     Liabilities to be assumed by ARTRA
           Notes payable                             $   263           $1,986
           Court ordered payments                      1,531              990
           Accrued expenses                               -               349
                                                     -------          -------
                                                       1,794            3,325
     Net liabilities of  the discontinued
           Jewelry Business                               -               374
                                                     -------          -------
                                                     $ 1,794          $ 3,699
                                                     =======          =======

     Noncurrent:
           Liabilities to be assumed by ARTRA
             Court ordered payments                  $    -           $   541
                                                     =======          =======


As noted in the table above, as of June 30, 1996,  remaining  pre-existing  Lori
liabilities assumed by ARTRA are $1,794,000. To the extent ARTRA is able to make
subsequent  payments,  they will be recorded as additional paid-in capital.  The
ability  of ARTRA to satisfy  these  obligations  is  uncertain.  The  financial
statements  of ARTRA include an  explanatory  paragraph  indicating  substantial
doubt about the ability of ARTRA to  continue  as a going  concern.  The amounts
receivable from ARTRA, exclusive of subsequent payments, have not been reflected
in the Company's  financial  statements at June 30, 1996. No collateral has been
provided in support of these obligations.

At December 31, 1995,  liabilities to be assumed by ARTRA included $1,531,000 of
court  ordered  payments  arising  from the May 3,  1993  reorganization  of New
Dimensions.  As of August 7, 1996, the $541,000 installment payment due December
31, 1995 had not been paid.

8.       LITIGATION

Prior to its entry into the Jewelry  Business in 1985,  the Company  operated in
excess  of 20  manufacturing  facilities  for the  production  of,  inter  alia,
photocopy machines,  photographic  chemical and paper coating.  These operations
were sold or  discontinued  in the late 1970s and early 1980s.  Certain of these
facilities  may have used  and/or  generated  hazardous  materials  and may have
disposed of the hazardous substances,  particularly before the enactment of laws
governing the safe disposal of hazardous substances, at an indeterminable number
of sites.  Although the controlling  stockholders and current  management had no
involvement in such prior manufacturing operations, the Company could be held to
be responsible for clean-up costs if any hazardous  substances were deposited at
these manufacturing  sites, or at off-site waste disposal  locations,  under the
Comprehensive  Environmental  Response,  Compensation  and Liability Act of 1980
("CERCLA"),  or under other Federal or state environmental laws now or hereafter
enacted. However, except for the Gary, Indiana site described below, the Company
has not been notified by the Federal Environmental Protection Agency (the "EPA")
that it is a  potentially  responsible  party for,  nor is the Company  aware of
having disposed of hazardous substances at, any site.
<PAGE>
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)


In December  1994,  the Company was notified by the EPA that it is a potentially
responsible  party under CERCLA for the disposal of  hazardous  substances  at a
site in Gary, Indiana.  The alleged disposal occurred in the mid-1970s at a time
when the Company conducted operations as APECO. In this connection,  in December
1994,  the Company was named as one of  approximately  80  defendants  in a case
brought in the United States District Court for the Northern District of Indiana
by a group of 14 potentially  responsible  parties who agreed in a consent order
entered into with the EPA to clean-up this site. The  plaintiffs  have estimated
that the cost of cleaning up this site to be $45  million,  and have  offered to
settle the case with the  Company  for  $991,445.  This  amount  represents  the
plaintiffs'  estimate of the Company's pro rata share of the clean-up costs. The
Company  declined to accept this  settlement  proposal,  which was  subsequently
withdrawn.

The  plaintiffs  have  produced  only  limited  testamentary  evidence,  and  no
documentary  evidence,  linking  the  Company to this site,  and the Company has
neither discovered any records which indicate, nor located any current or former
employees who have advised,  that the Company deposited hazardous  substances at
the site.  Based on the  foregoing,  management  of the Company does not believe
that it is probable  that the Company will have any  liability  for the costs of
the clean-up of this site.  The Company  intends to vigorously  defend itself in
this case.

Under  the  terms of the  Assumption  Agreement,  ARTRA  has  agreed  to pay and
discharge  substantially  all  of the  Company's  pre-existing  liabilities  and
obligations,  including  environmental  liabilities  at any  sites at which  the
Company  allegedly  operated  facilities  or disposed of  hazardous  substances,
whether or not the Company is currently identified as a potentially  responsible
party therefor.  Consequently,  the Company is entitled to indemnification  from
ARTRA for any environmental  liabilities associated with the Gary, Indiana site.
No assurance can,  however,  be given that ARTRA will be financially  capable of
satisfying its obligations under the Assumption Agreement.

The  Company  and its  subsidiaries  are  parties  in various  business  related
litigation which, in the opinion of management, will not have a material adverse
effect on the Company's financial position and results of operations.

9.       RELATED PARTY TRANSACTIONS

The Company made a loan of $331,000 in the aggregate to Michael Ferrentino,  the
President  and a Director of the Company,  Christopher  P. Franco,  an Executive
Vice President of the Company, Kevin W. Kiernan, an employee of the Company, and
James L. Paterek,  a consultant to the Company,  to cover their tax  liabilities
resulting from the issuance of the Company's  Common Stock to them as inducement
to join the Company.  Of this amount,  $55,000 was advanced in 1995, $38,000 was
advanced in February 1996, and $238,000 was advanced in April 1996.

Yield  Industries,  Inc.,  a  corporation  wholly-owned  by Messrs.  Paterek and
Ferrentino,  earned a delivery fee of $500,000 in connection  with the Company's
acquisition  of  COMFORCE  Global,  $250,000  of which  was paid in 1995 and the
balance of which was paid in January 1996.

10.      SUBSEQUENT EVENTS

On July 22,  1996,  the  Company  and certain  subsidiaries  entered  into a $10
million  Revolving  Credit  Agreement  (the "Credit  Agreement")  with The Chase
Manhattan  Bank  ("Chase")  to  provide   working   capital  for  the  Company's
operations.  The Company, COMFORCE Global, and COMFORCE Technical Services, Inc.
are  co-borrowers  under the Credit Agreement and Project Staffing Support Team,
Inc. ("PSST") is a guarantor of the obligations. Principal outstanding under the
Credit  Agreement is due June 30, 1998.  Chase agrees to make  revolving  credit
loans outstanding as Prime Rate loans or LIBOR loans,  provided that, during the
occurrence  and  continuance  of an  event  of  default,  the  Company  and  its
subsidiaries  may not elect,  and Chase shall have no obligation to make,  LIBOR
loans.  Interest  on LIBOR loans is payable in the amount of the LIBOR rate plus
2.0% per  annum.  Interest  on the Prime  Rate loans is payable in the amount of
Chase's prime rate as announced from time to time.

Chase may also issue letters of credit, not to exceed $250,000 in the aggregate,
to support  offsite payroll  services,  as security in connection with operating
leases,  and for other  general  corporate  purposes  with the consent of Chase.
Interest on drawings  under  letters of credit shall be  calculated at the Prime
Rate of  interest.  One  percent of the face  amount of each letter of credit is
payable to Chase per annum and  certain  fees on each  letter of credit  issued,
payable at the time of issuance.
<PAGE>

    NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)


Available advances under the Credit Agreement are based upon the amount equal to
80% of eligible  receivables of COMFORCE Global and COMFORCE Technical Services,
Inc., less the aggregate amount of accrued payroll taxes due by those companies.

The Credit  Agreement  contains  certain  affirmative  and  negative  covenants,
including  restrictions on the creation of  indebtedness  or liens,  the sale of
assets,  the  acquisition of stock or assets of another  entity,  the payment of
dividends, capital expenditures, and other financial covenants. Borrowings under
the Credit Agreement are secured by all goods, equipment,  inventory,  accounts,
contract  rights,  chattel  paper,  notes  receivable,  instruments,  documents,
general  intangibles,  credits,  claims,  and obligations of the Company and its
subsidiaries.  Additionally, all of the issued and outstanding stock of COMFORCE
Global, COMFORCE Technical Services, Inc. and PSST are pledged as security.
<PAGE>

 Item 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
RESULTS OF OPERATIONS

Change in Business

From 1985 until September 1995, the Company, under the name The Lori Corporation
("Lori"),  designed and distributed  fashion costume jewelry.  Due to continuing
losses in the Jewelry  Business and the erosion of the markets for its products,
Lori  determined  to seek to enter into another line of business.  In June 1995,
Lori contracted  with current  management to direct its entry into the technical
staffing business.  On October 17, 1995, the Company acquired all of the capital
stock of Spectrum Global Services,  Inc. (formerly d/b/a YIELD TechniGlobal and,
following  its  acquisition  by  the  Company,   renamed  COMFORCE  Global  Inc.
("COMFORCE  Global")),  a provider of technical staffing and consulting services
in the information technology and telecommunications  sectors.  Accordingly,  on
October 17,  1995,  the  Company  became a provider of  technical  staffing  and
consulting services. Prior to its acquisition by COMFORCE, COMFORCE Global was a
wholly owned subsidiary of Spectrum Information Technologies, Inc. In connection
with its new  business  direction,  the  Company  changed  its name to  COMFORCE
Corporation.  Effective  September  30,  1995,  the  Company  adopted  a plan to
discontinue the Jewelry Business.

The  price  paid by the  Company  for the  COMFORCE  Global  stock  and  related
acquisition costs was  approximately  $6.4 million,  net of cash acquired.  This
consideration  consisted of cash to the seller of  approximately  $5.1  million,
fees of approximately $700,000,  including a fee of $500,000 to a related party,
and 500,000  shares of the Company's  Common Stock issued as  consideration  for
various fees and guarantees associated with the transaction.

In order to facilitate the COMFORCE Global acquisition, ARTRA agreed to exchange
all of the  Series C  Preferred  Stock of the  Company  then  held by it  (9,701
shares,  which constituted all of the issued and outstanding  Preferred Stock of
the Company) for 100,000 shares of the Company's  Common Stock.  The liquidation
value of the Series C Preferred  Stock was $19.5  million in the  aggregate.  In
addition,  the Company and ARTRA entered into an Assumption  Agreement effective
as of October 17, 1995.

Under the Assumption Agreement,  ARTRA agreed to pay and discharge substantially
all of the then existing  liabilities and obligations of the Company,  including
indebtedness,   corporate   guarantees,   accounts  payable  and   environmental
liabilities.  ARTRA also agreed to assume  responsibility for all liabilities of
the  Jewelry  Business  from and  after  the  effective  date of the  Assumption
Agreement,  and is entitled to receive the net  proceeds,  if any, from the sale
thereof.  On April 12,  1996,  ARTRA sold the business and certain of the assets
related to the Company's discontinued Jewelry Business,  and, accordingly,  will
be  entitled  to the net  proceeds,  if any,  from  this  disposition  after the
satisfaction of its creditors.
<PAGE>

In October  and  November  1995,  in order to fund the  acquisition  of COMFORCE
Global and meet certain working capital requirements, the Company sold 1,946,667
shares of its Common  Stock in a private  offering  in units  consisting  of one
share of Common Stock with a detachable  warrant to purchase  one-half  share of
Common Stock (973,333  shares in the aggregate) for a selling price of $3.00 per
unit. The gross proceeds from the offering were $5,840,000. The warrants have an
exercise  price of $3.375  per share  and are  exercisable  for a period of five
years  from  the date of grant  commencing  June 1,  1996  (except  for  certain
warrants which were subsequently amended to provide for immediate exercise).

The acquisition of COMFORCE Global was accounted for by the purchase method and,
accordingly,  the assets and liabilities of COMFORCE Global were included in the
Company's financial  statements at their estimated fair market value at the date
of acquisition.

In March 1996, the Company acquired all of the assets of Williams  Communication
Services,  Inc. (" Williams"),  a provider of  telecommunications  and technical
staffing.  The  purchase  price for the assets of Williams was $2 million with a
four year  contingent  payout  based on earnings of  Williams.  The value of the
contingent payouts will not exceed $2 million, for a total purchase price not to
exceed $4 million.  The  acquisition  was funded by a  revolving  line of credit
under the Credit Agreement between the Company,  certain of its subsidiaries and
Chase.

On May 10,  1996,  the Company  purchased  all of the stock of Project  Staffing
Support Team, Inc. and substantially all of the assets of RRA, Inc. and Datatech
Technical Services, Inc.  (collectively,  "RRA") for an aggregate purchase price
of $5,000,000 plus contingent  payments payable over three years in an aggregate
amount not to exceed  $750,000.  RRA is in the  business of  providing  contract
employees to other  businesses.  The  headquarter  offices for the companies are
located in Tempe, Arizona.

1996 Plan of Operations

The  Company  established  its  telecommunications  staffing  business  with the
acquisition  of COMFORCE  Global in October 1995, and further  strengthened  its
base with the  acquisition of Williams in March 1996.  COMFORCE  Global provides
telecommunications   and  computer   specialists  and  expertise  on  a  project
outsourcing  basis,  primarily  to Fortune 500  companies  worldwide.  It offers
manpower on a contract basis to the  telecommunications and computer industries,
on both a short-term  and  long-term  basis,  to meet its  customers'  needs for
virtually  every  staffing  level within these  industries,  including  wireless
infrastructure services, network management,  engineering,  design and technical
support.

The Company  established its technical services platform with the acquisition of
RRA, and is actively seeking an acquisition of a platform company  servicing the
information technology market sector. The Company's COMFORCE Technical Services,
Inc. subsidiary will provide specialists for supplemental  staffing  assignments
as  well  as  outsourcing  and  vendor-on-premises  programs,  primarily  in the
electronics,  avionics,  telecommunications  and information technology business
sectors.

The Company has  identified  the area of skilled  technical  contract  labor and
consulting for the  telecommunications  and information  technology sectors as a
high growth,  profitable  market niche that could benefit from new opportunities
in the wireless telephone industry and growth in networked  information  systems
and  the  "information  superhighway."  The  Company  believes  that  it is well
positioned   to  capitalize  on  the   anticipated   continued   growth  in  the
telecommunications  and information  technology and technical sectors due to its
size,  geographic  breadth and  industry  expertise in providing a wide range of
<PAGE>

staffing services. The Company will seek to grow significantly through strategic
acquisitions,  the opening of offices in new and existing markets and aggressive
recruiting, training, and marketing of industry specialists with a wide range of
technical expertise.

The  Company's   growth  strategy   includes  the  acquisition  of  established,
profitable  regional  staffing  companies  in  markets  with  attractive  growth
opportunities.  These "platform"  companies are intended to serve as a basis for
future growth and, therefore,  must have the management infrastructure and other
operating  characteristics  necessary  to  significantly  expand  the  Company's
presence  within a specific market sector or geographic  area. In addition,  the
Company has as an objective acquisitions of smaller companies, the operations of
which supplement, and can be integrated into, the established platform companies
to increase market share and profits with minimal incremental expense.

The Company believes it can also increase revenues though internal growth due to
its  presence in the  information  technology  and  telecommunications  sectors.
Further, the Company believes that it can achieve significant economies of scale
by opening and clustering branch offices in new and existing markets through the
allocation of  management,  advertising,  recruiting  and training  costs over a
larger revenue base. In addition, the Company has targeted selected areas of the
technical  services  markets  which it  believes  have high  growth  and  profit
potential.

The statements  above and elsewhere in this Report that suggest that the Company
will  increase   revenues,   achieve   significant   growth  through   strategic
acquisitions or other means, realize operating efficiencies, and like statements
as to the Company's  objectives  and  management's  beliefs are forward  looking
statements.  Various  factors  could  prevent the Company from  realizing  these
objectives, including the following:

Unfavorable  economic  conditions   generally  or  in  the   telecommunications,
computing or technical  services business sectors could cause potential users of
such services to decide to cancel or postpone  capital  expansion,  research and
development  or  other  projects  which  require  the  engagement  of  temporary
technical staff workers or the use of consulting and other  technical  expertise
offered by the Company.

The Company's ability to expand through acquisitions is dependent on its ability
to  identify   attractive   acquisition   opportunities   and  to  finance  such
acquisitions,  and no assurance can be given that it will be successful in doing
so.  Heightened  competition  in  the  staffing  industry  by  existing  or  new
competitors could make such acquisitions  uneconomic or otherwise more difficult
or costly.  Unless the Company's  operations  are considered to be successful by
bank or other  institutional  lenders or investors,  it may be difficult for the
Company to finance its expansion through acquisitions.

The Company is seeking to expand rapidly in what its  management  perceives as a
"window of  opportunity" in the market.  Expansion  undertaken at an accelerated
pace, principally through acquisitions,  creates added risk that the analysis of
businesses  acquired will fail to uncover  business  risks or adequately  reveal
weaknesses  in  the  markets,   management  or  operations   being   considered.
Furthermore,  the Company expects in many cases to retain existing management of
acquired companies to manage the businesses  acquired.  Compensation  incentives
designed to enroll the existing management,  which the Company expects to offer,
are difficult to structure in a manner so as to provide lasting  benefits to the
acquiring company.

Heightened  competition  for customers as well as for technical  personnel could
adversely  impact the Company's  margins.  Heightened  competition for customers
could  result in the Company  being  unable to  maintain  its current fee scales
without  being  able to reduce  its  personnel  costs.  Shortages  of  qualified
technical  personnel,  which currently  exist in some technical  specialties and
could occur in others in the future, could result in the Company being unable to
fulfill its customers'  needs or in the customers  electing to employ  technical
staff  directly  (rather  than  using the  Company's  services)  to  ensure  the
availability  of such  personnel.  Many of the Company's  competitors  have more
extensive financial and personnel resources than does the Company.

Under the Assumption Agreement entered into between the parties in October 1995,
ARTRA  agreed  to pay  and  discharge  substantially  all of the  then  existing
liabilities and obligations of the Company,  including  indebtedness,  corporate
guarantees,  accounts payable and environmental  liabilities.  No assurance can,
however,  be given that  ARTRA will be  financially  capable of  satisfying  its
obligations  under the  Assumption  Agreement,  in which case the Company may be
required to satisfy such obligations.
<PAGE>

Liquidity and Capital Resources

Management  believes that the Company will  generate  cash flow from  operations
which,  together  with  proceeds  from the exercise of certain  warrants and the
issuance  of  Series  D and E  Preferred  Stock in  April  and May 1996, will be
sufficient  to fund  its  telecommunications  and  computer  technical  staffing
services  business  for the  remainder  of 1996;  however,  the Company does not
expect to have  sufficient  liquidity  or capital  resources to fund its planned
expansion through acquisitions and other means. The Company intends to seek debt
and/ or  equity  financing  to fund  such  planned  expansion.  See"--Change  in
Business" and "--1996 Plan of  Operations"  for a  description  of the Company's
current and proposed plans of expansion.

Cash and cash equivalents  increased $1,629,000 during the six months ended June
30, 1996.  Cash flows provided by financing  activities of $13,051,000  exceeded
cash flows used in operating  activities  of  $3,318,000  and cash flows used by
investing activities of $8,104,000. Cash flows used by operating activities were
principally attributable to the temporary need to fund Williams and RRA accounts
receivable  and their  carrying  costs due to the  purchase of Williams in March
1996  and  RRA  in May  1996.  Cash  flows  used  in  investing  activities  are
principally  related  to the  purchase  of  Williams  and  RRA  for a  total  of
$7,450,000  including  directly  related costs, as well as loans made to certain
officers of the Company pursuant to their employment  contracts in the amount of
$331,000 and the purchase of fixed assets in the amount of $323,000.  Cash flows
from financing  activities were  attributable to borrowings  under the revolving
line of  credit  of  $1,500,000,  the  exercise  of  warrants  in the  amount of
$999,000,  and the  issuance of Series E Preferred  Stock and Series D Preferred
Stock in the amount of $4,636,000 and $6,416,000, respectively.

During the six months ended June 30, 1996,  the Company  eliminated  its working
capital  deficiency  and,  at June 30,  1996,  had  excess  working  capital  of
$4,385,000.  The increase in working capital is principally  attributable to the
Company's  increase in accounts  receivable due to the  acquisitions of Williams
and RRA,  the  issuance  of  shares of  Series D and E  Preferred  Stock and the
reduction in the liabilities assumed by ARTRA.

On July 22, 1996, the Company and certain of its subsidiaries entered into a $10
million  Revolving  Credit  Agreement with The Chase Manhattan Bank ("Chase") to
provide  working  capital  for  the  Company's  operations.  See  Note 10 to the
condensed consolidated financial statements.


Results of Operations

On October 17, 1995, the Company completed the acquisition of all of the capital
stock of  COMFORCE  Global,  a provider of  technical  staffing  and  consulting
services in the information technology and telecommunications  sectors. Due to a
pattern of reduced sales volume  resulting in continuing  operating  losses,  in
September 1995, the Company adopted a plan to discontinue its Jewelry  Business.
The Company's consolidated financial statements have been reclassified to report
separately   results  of  operations  of  the  discontinued   Jewelry  Business.
Therefore,  a comparison of the Company's consolidated results of operations for
the  three  and six  months  ended  June  30,  1996  and  June  30,  1995 is not
meaningful.  Accordingly,  a discussion of pro forma  results of operations  for
these periods is provided.

Pro Forma Three Months ended June 30, 1996 vs. Pro Forma Three Months ended June
30, 1995

Pro forma revenues of $17,542,000 for the three months ended March 31, 1996 were
$584,000,  or 3% higher than pro forma  revenues for the three months ended June
30, 1995. The increase in 1996 pro forma revenues is attributable to the overall
growth and  expansion  of  COMFORCE  Global's  telecommunications  and  computer
staffing  business as well as growth in the  operations of Williams and RRA. Pro
forma cost of  revenues of the three  months  ended June 30, 1996 was 86% of pro
forma  revenues  compared  to pro forma  cost of  revenues  of 87% for the three
months  ended June 30, 1995.  The dollar  increase in the 1996 pro forma cost of
revenues is principally  attributable  to increased  sales volume.  The 1996 pro
forma cost of revenues  percentage  decrease of 1% is primarily  attributable to
higher margins of new business.
<PAGE>

Pro forma operating  expenses for the three months ended June 30, 1996 increased
$60,000 as compared to pro forma  operating  expenses for the three months ended
June 30, 1995.

Pro forma operating income for the three months ended June 30, 1996 was $840,000
compared to pro forma  operating  income of $580,000  for the three months ended
June 30, 1995 due to both the increase in sales and the related  improved margin
on those sales.

Corporate  management  fees of $357,000 from COMFORCE  Global's  former  parent,
Spectrum  Information  Technologies,  Inc.,  reflect an  allocation of corporate
overhead;  however, such charges will no longer continue as a result of COMFORCE
Global's  acquisition  by  the  Company  in  October  1995.  In the  opinion  of
management, the amount of these fees are not representative of costs incurred by
COMFORCE Global on a stand alone basis.

Pro forma other expense, principally interest, net of other income for the three
months ended June 30, 1996 decreased $76,000 principally due to the discharge of
indebtedness of Lori and its Jewelry Business.


Pro Forma Six Months ended June 30, 1996 vs. Pro Forma Six Months ended June 30,
1995

Pro forma  revenues of  $36,598,000  for the six months ended June 30, 1996 were
$4,843,000,  or 15% higher than pro forma revenues for the six months ended June
30, 1996. The increase in 1996 Pro forma revenues is attributable to the overall
growth and  expansion  of  COMFORCE  Global's  telecommunications  and  computer
staffing  business as well as the growth in Williams  and RRA. Pro forma cost of
revenues  for six months  ended June 30,  1996 and June 30,  1995 was 88% of pro
forma  revenues.  The 1996  dollar  increase  in pro forma cost of  revenues  of
$43,017,000 is principally attributable to the increase in sales volume.

Pro forma  operating  expenses for the six months ended June 30, 1996  decreased
$3,238,000  compared to pro forma  operating  expenses  for the six months ended
June 30, 1995. The 1996 decrease in pro forma operating  expenses is principally
attributable  to the 1995  compensation  charge  of  $3,425,000  related  to the
issuance of a 35% interest in the Company to certain  individuals  to manage the
Company's  entry into and  development  of the  telecommunications  and computer
technical staffing services business.

Pro forma operating income for the six months ended June 30, 1996 was $1,469,000
as compared to pro forma  operating  loss of $2,595,000 for the six months ended
June 30,  1995.  The  improvement  in 1996 is  principally  attributable  to the
compensation   charge  discussed  above  plus  the  increased  operating  income
generated by increased revenues in the pro forma 1996 period.

Corporate  management  fees  from  COMFORCE  Global's  former  parent,  Spectrum
Information  Technologies,  Inc.,  reflect an allocation of corporate  overhead;
however,  such charges will no longer continue as a result of COMFORCE  Global's
acquisition  by the Company in October 1995. In the opinion of  management,  the
amount of these fees are not representative of costs incurred by COMFORCE Global
on a stand alone basis.

Pro forma other expenses,  principally interest, net of other income for the six
months ended June 30, 1996 decreased  $139,000  principally due to the discharge
of indebtedness of Lori and its Jewelry Business.
<PAGE>


                           PART II - OTHER INFORMATION

Item 2.  Changes in Securities

In April 1996, in connection  with  financing the RRA  acquisition,  the Company
sold 8,871 shares of its newly authorized  Series E Preferred Stock  (designated
as the Series E Convertible  Preferred  Stock,  10,000 shares  authorized)  at a
selling  price of $550 per  share for  8,470  shares  and $750 per share for 401
shares.  Each share of Series E Preferred Stock will be automatically  converted
into 100  shares  of  Common  Stock on the date  the  Company's  Certificate  of
Incorporation  is amended so that the  Corporation  has a  sufficient  number of
authorized and unissued shares of Common Stock to effect the conversion, and any
accrued and unpaid  dividends  have been paid in full (as has been  proposed for
consideration  of the  stockholders  at the  Company's  next  annual  meeting of
stockholders).  Holders of shares of Series E  Preferred  Stock are  entitled to
dividends  equal to those declared on the Common Stock,  or, if no dividends are
declared on the Common Stock,  nominal  cumulative  dividends are payable if the
Series E Preferred Stock fails to be converted into Common Stock by September 1,
1996.  In such  event,  no  dividends  shall be  payable  to the  holders of the
Company's Common Stock to the extent there are any unpaid cumulated dividends on
the Series E Preferred Stock.

In May 1996,  the Company  sold 7,002  shares of its newly  authorized  Series D
Preferred Stock (designated as the Series D Senior Convertible  Preferred Stock,
15,000  shares  authorized)  for $1,000  per share.  The holder of each share of
Series D  Preferred  Stock will have the right to convert  such share into 83.33
fully paid and  nonassessable  shares of Common Stock at any time  subsequent to
the date the  Company's  Certificate  of  Incorporation  is  amended so that the
Corporation has a sufficient  number of authorized and unissued shares of Common
Stock to effect the  conversion.  If at any time after the first  anniversary of
the date of first  issuance  of the  Series D  Stock,  the  Common  Stock of the
Company  has a closing  sale  price of at least $20 per share for a period of 20
consecutive  trading  days,  the  Company may convert all shares of the Series D
Preferred Stock then  outstanding  into shares of Common Stock at $12 per share,
without prior notice to the Stockholder.  All shares of Series D Preferred Stock
outstanding on the fifth anniversary of the date of first issuance of the Series
D Preferred  Stock will  automatically  be converted into shares of Common Stock
based on the  conversion  price of $12 per share.  Holders of shares of Series D
Preferred  Stock are entitled to cumulative  dividends of 6% per annum,  payable
quarterly in cash on the first day of February, May, August and November in each
year.  For the purposes of  conversion,  to the extent that the Company does not
pay any  accrued  and unpaid  dividends  within 15 days of the  conversion  with
respect to those shares,  such amount shall be added to the conversion value for
those  shares.  Except as  otherwise  provided  by law,  the holders of Series D
Preferred  Stock will not be  entitled to vote.  As a result of the  issuance of
these  shares,  no  dividends  shall be payable to the holders of the  Company's
Common  Stock to the extent  there are any  unpaid  cumulated  dividends  on the
Series D Preferred Stock.


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

(a)  Exhibits.

3.1      Designation  of Rights  and  Preferences  of Series D  Preferred  Stock
         (filed as an exhibit to the Company's Quarterly Report on Form 10-Q for
         the quarter ended March 31, 1996 and incorporated herein by reference).

3.2      Designation  of Rights  and  Preferences  of Series E  Preferred  Stock
         (filed as an exhibit to the Company's Quarterly Report on Form 10-Q for
         the quarter ended March 31, 1996 and incorporated herein by reference).

10.1     Revolving  redit  Agreement  dated  as  of   July 22, 1996,  among  the
         Company, COMFORCE  Global,  Inc.,  COMFORCE  Technical  Services,  Inc.
         and The Chase Manhattan Bank.

11.1     Computation of Earnings (Loss) Per Share and Equivalent Share of Common
         Stock.

(b)  Reports on Form 8-K.

         On May 14, 1996, the Company filed  Amendment No. 1 to a Current Report
         on Form  8-K/A  to  include  the  financial  statements  and pro  forma
         financial   statements   required  in  connection   with  the  Williams
         acquisition.

         On May 23,  1996,  the  Company  filed a Current  Report on Form 8-K to
         disclose the RRA acquisition.

         On June 3, 1996, the Company filed  Amendment No. 1 to a Current Report
         on Form  8-K/A  to  include  the  financial  statements  and pro  forma
         financial statements required in connection with the RRA acquisition.
<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 thereunder duly authorized.



                                                  COMFORCE CORPORATION
                                                  --------------------
                                                       Registrant


Dated:   August 14, 1996                              PAUL J. GRILLO
------------------------                          ---------------------
                                                   Vice President/Finance
                                                  Chief Financial Officer