UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

(Mark One)

[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
      AND EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31,
      1999
                                       OR
[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
      SECURITIES AND EXCHANGE ACT OF 1934

                         COMMISSION FILE NUMBER: 0-27314

                               AMC FINANCIAL, INC.
                      (Formerly CITYSCAPE FINANCIAL CORP.)
             (Exact name of Registrant as specified in its charter)

            DELAWARE                                        11-2994671
(State or other jurisdiction                            (I.R.S. Employer
of incorporation or organization)                      Identification No.)

11111 WILCREST GREEN, SUITE 250,                         (713) 787-0100
     HOUSTON, TEXAS 77042                        (Registrant's telephone number,
(Address of principal executive                        including area code)
  offices, including zip code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:   NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:   COMMON STOCK,
                                                              PAR VALUE $.01
                                                              PER SHARE

Indicate by check 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 such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirement for
the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

As of April 10, 2000, the aggregate market value of the registrant's common
stock held by non-affiliates: N/A

DOCUMENTS INCORPORATED BY REFERENCE

PORTIONS OF REGISTRANT'S PROXY STATEMENT RELATED TO ITS 2000 ANNUAL MEETING OF
SHAREHOLDERS ARE INCORPORATED BY REFERENCE INTO PART III OF THIS FORM 10-K.

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:

INDICATE BY CHECK MARK WHETHER THE REGISTRANT HAS FILED ALL DOCUMENTS AND
REPORTS REQUIRED TO BE FILED BY SECTIONS 12, 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 SUBSEQUENT TO THE DISTRIBUTION OF SECURITIES UNDER A PLAN
CONFIRMED BY A COURT. YES [X]  NO [ ]

ON OCTOBER 6, 1998, THE REGISTRANT AND ITS WHOLLY-OWNED SUBSIDIARY EACH FILED
VOLUNTARY PETITIONS FOR RELIEF UNDER CHAPTER 11 OF TITLE 11 WITH THE UNITED
STATES BANKRUPTCY COURT FOR THE FEDERAL BANKRUPTCY CODE IN THE SOUTHERN DISTRICT
OF NEW YORK.

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

7,767,452 SHARES, $.01 PAR VALUE, OF COMMON STOCK WERE OUTSTANDING AS OF APRIL
10, 2000

<PAGE>
                               AMC FINANCIAL, INC.
                      (FORMERLY CITYSCAPE FINANCIAL CORP.)

                             FORM 10-K REPORT INDEX
                      FOR THE YEAR ENDED DECEMBER 31, 1999
                                TABLE OF CONTENTS

PART I.

   ITEM 1.  BUSINESS..................................................... 3
   ITEM 2.  PROPERTIES................................................... 6
   ITEM 3.  LEGAL PROCEEDINGS............................................ 7
   ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..........11

PART II.

   ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
            STOCKHOLDER MATTERS..........................................12
   ITEM 6.  SELECTED FINANCIAL DATA......................................12
   ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS..........................14
   ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
            MARKET RISK..................................................22
   ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA..................23
   ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
            ACCOUNTING AND FINANCIAL DISCLOSURE..........................52

PART III.

   ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT...........53
   ITEM 11. EXECUTIVE COMPENSATION.......................................53
   ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
            MANAGEMENT...................................................53
   ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...............53

PART IV.

   ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
            FORM 8-K.....................................................54

                                       2
<PAGE>
                                     PART I

ITEM 1.  BUSINESS

GENERAL

AMC Financial, Inc. ("AMC"), formerly Cityscape Financial Corp. ("Cityscape"),
was incorporated in Delaware in December 1988. During 1999 its principal
executive offices were moved from Elmsford, New York to Houston, Texas. Unless
otherwise noted, the "Company" refers to AMC, formerly Cityscape, and its
subsidiaries.

Cityscape was a consumer finance company which, through its wholly-owned
subsidiary, Cityscape Corp. ("CSC"), was in the business of selling and
servicing mortgage loans secured primarily by one- to four-family residences.
Such business was suspended indefinitely in November 1998. CSC also had been in
the business of originating and purchasing mortgage loans. The majority of CSC's
loans were made to owners of single-family residences who used the loan proceeds
for such purposes as debt consolidation, financing of home improvements and
educational expenditures. The Company has been reorganized through a plan of
reorganization under Chapter 11 of Title 11 of the United States Bankruptcy Code
effective as of July 1, 1999. A plan for the reorganized company has not been
formulated, however, and the Company has selected Peter J. Solomon Company
Limited to advise the Company on strategic alternatives. Until a formal plan is
determined, the Company is generating revenue from investing funds in high-grade
commercial paper and interest on loans held for sale.

CHAPTER 11 PROCEEDINGS

Cityscape determined during 1998 that the best alternative for recapitalizing
over the long-term and maximizing the recovery of creditors and senior equity
holders of Cityscape was through a prepackaged plan of reorganization for
Cityscape and CSC pursuant to the Bankruptcy Code. On October 6, 1998, Cityscape
and CSC filed voluntary petitions (the "Petitions") in the United States
Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court").

During the second and third quarters of 1998, Cityscape engaged in negotiations,
first with holders of a majority of the Notes (as defined below), and, second
with holders of a majority of the Convertible Debentures (as defined below) on
the terms of a plan of reorganization that both groups would find acceptable.
Those negotiations resulted in acceptance by both groups by the requisite
majorities of the terms of the plan of reorganization (the "Original Plan").
Cityscape solicited acceptances of the Original Plan from the holders of its
Notes, Convertible Debentures and Preferred Stock (as defined below). The
Original Plan received the requisite approval from all classes other than the
holders of Cityscape's Series B Preferred Stock ("Preferred Stock"). Although
Cityscape and other parties with an economic stake in the reorganization
anticipated that the Original Plan would be confirmed at the originally
scheduled confirmation hearing, the Original Plan was not confirmed due
primarily to deteriorating market conditions and Cityscape's inability to obtain
necessary post-reorganization loan warehouse financing to allow it to emerge
from Chapter 11. As a result, Cityscape revised the Original Plan (the "Amended
Plan").

On November 17, 1998, Cityscape decided to suspend indefinitely all of its loan
origination and purchase activities. Cityscape notified its brokers that it had
ceased funding mortgage loans other than loans that

                                       3
<PAGE>
were in its origination pipeline for which it had issued commitments.
Cityscape's decision was based upon its determination, following discussions
with potential lenders regarding post-reorganization loan warehouse financing,
that adequate sources of such financing were not available. With no adequate
sources of such financing, Cityscape determined that it was unable to continue
to originate and purchase mortgage loans. On or about December 18, 1998,
Cityscape funded the last of its mortgage loans for which it had issued
commitments as of November 17, 1998.

On June 16, 1999, the Bankruptcy Court entered an order confirming
reorganization under the Amended Plan. The effective date of the Amended Plan
was July 1, 1999, and Cityscape was renamed AMC Financial, Inc. The Amended Plan
provided for substantive consolidation of the assets of Cityscape and CSC and
for distributions to creditors as summarized below (which estimated
distributions were based upon Cityscape's and CSC's estimate of $10.0 million in
general unsecured claims that would ultimately be allowed by the Bankruptcy
Court). The Amended Plan provided that: (i) administrative claims, priority tax
claims, bank claims, other secured claims, and priority claims would be paid in
cash in full, which claims paid by the Company as of December 31, 1999 totaled
$3,337,895; (ii) holders of the 12 3/4% Series A Senior Notes (the "Notes") due
2004 have been allocated in exchange for all of their claims, 7,346,708 shares
or approximately 92.5% of the new common shares, of which 7,325,192 shares have
been issued at December 31, 1999; (iii) holders of 6% Convertible Subordinated
Debentures (the "Convertible Debentures") due 2006 have been allocated in
exchange for all of their claims, 431,702 shares or approximately 5.4% of the
new common shares, of which 376,373 shares have been issued as of December 31,
1999; (iv) holders of general unsecured claims have been allocated 165,790
shares or approximately 2.1% of the new common shares, of which 42,057 shares
have been issued at December 31, 1999; and (v) common stock, Preferred Stock and
warrants of Cityscape would be extinguished and holders thereof would receive no
distribution under the Amended Plan.

For the statement of financial condition presentation and earnings per share
calculation, the Company considers as outstanding shares only those shares
actually distributed to creditors. As claims are settled, additional shares are
transferred to the stock distribution agent for issuance. Since the total shares
allocated for each class of claims may not actually be issued, the Company has
elected to include in outstanding shares only those shares actually issued. The
Company expects the stock distribution agent to complete the issuance of
remaining shares by the end of 2000.

FRESH START REPORTING

As of June 30, 1999, the Company adopted fresh start reporting in accordance
with the American Institute of Certified Public Accountants Statement of
Position 90-7, "Financial Reporting by Entities in Reorganization under the
Bankruptcy Code" ("SOP 90-7"). In accordance with fresh start accounting, the
gain on discharge of debt resulting from the bankruptcy proceedings was
reflected on the Predecessor Company's (as defined below) financial statements
for the six months ended June 30, 1999. In addition, the accumulated deficit of
the Predecessor Company at June 30, 1999, was eliminated, and at July 1, 1999,
the Reorganized Company's (as defined below) financial statements reflected no
beginning retained earnings or deficit. Since July 1, 1999, the Company's
financial statements have been prepared as if it is a new reporting entity and a
black line has been placed to separate pre-reorganization operating results (the
"Predecessor Company") from post-reorganization operating results (the
"Reorganized Company") since they are not prepared on a comparable basis.

                                       4
<PAGE>
Under fresh start accounting, all assets and liabilities are restated to reflect
their reorganization value, which does not assume any future origination and
loan sales, and which approximates fair value at the date of reorganization. The
reorganization value approximates the fair value of the Company's assets before
considering liabilities, which must be assumed and extinguished pursuant to the
terms of the reorganization under the Amended Plan, and represents the Company's
estimate of the amount a buyer would pay for the assets after the restructuring.

BUSINESS STRATEGY

Since the reorganization, the Company has concentrated its efforts on settling
claims and distributing shares of the common stock of the Reorganized Company.
Available cash has been invested in high-grade commercial paper.

The Company recently selected a financial advisor, Peter J. Solomon Company
Limited, to advise the Company on strategic alternatives. Alternatives include
re-entering the mortgage loan origination business, investments, acquisitions,
sale or merger of the Company to or with another entity, or liquidation.
Depending upon the Company's selection of a strategic alternative for its
operations, the Company may seek to have its stock listed on a national
securities exchange, market or board. Although no timetable has been established
to evaluate alternatives or determine which alternative is appropriate for the
Company, Peter J. Solomon Company Limited is expected to make a presentation to
the Company before the end of April 2000. The presentation will set out the
range of strategic alternatives identified by Peter J. Solomon Company Limited
and the particular alternative or alternatives recommended for consideration by
the Company.

UK OPERATIONS - DISCONTINUED

Cityscape commenced operations in May 1995 with the formation of City Mortgage
Corporation Limited ("CSC-UK"), an English corporation that originated, sold and
serviced loans in England, Scotland and Wales.

The Company adopted a plan in March 1998 to sell the assets of CSC-UK. In April
1998, pursuant to an Agreement for the Sale and Purchase of the Business of
CSC-UK and its Subsidiaries and the Entire Issued Share Capital of City Mortgage
Receivables 7 Plc, dated March 31, 1998 (the "UK Sale Agreement"), the Company
completed the sale to Ocwen Financial Corporation ("Ocwen") and Ocwen Asset
Investment Corp. ("Ocwen Asset") of substantially all of the assets, and certain
liabilities, of CSC-UK (the "UK Sale"). The UK Sale included the acquisition by
Ocwen of CSC-UK's whole loan portfolio and loan origination and servicing
businesses for a price of (pound)249.6 million, the acquisition by Ocwen Asset
of CSC-UK's securitized loan residuals for a price of (pound)33.7 million and
the assumption by Ocwen of (pound)7.2 million of CSC-UK's liabilities. The price
paid by Ocwen was subject to adjustment to account for the actual balances on
the closing date of the loan portfolio and the assumed liabilities. As a result
of the sale, the Company received proceeds, at the time of the closing, of $83.8
million, net of closing costs and other fees. During 1998, the Company received
an additional $4.5 million from Ocwen related to the loan portfolio adjustment.
On February 15, 1999, the Company entered into a settlement agreement with
Ocwen. In June 1999, the Company received an additional $3.1 million in
settlement of the assumed liabilities at the date of sale.

                                       5
<PAGE>
COMPETITION

Since the Company's reorganization in July 1999, the Company has not reentered
competitive markets. Should the Company resume the mortgage origination business
in the future, the Company could face intense competition from other mortgage
banking companies, commercial banks and finance companies, many of which have
considerably greater financial and marketing resources than the Company.
Prevailing interest rates and market conditions could impact the Company's
decision to resume the mortgage origination business.

REGULATION

Since suspending its loan origination business in November 1998, the Company is
no longer subject to extensive regulations by federal, state and local
government authorities. All loans currently held in the Company's portfolio are
being serviced by other institutions.

ENVIRONMENTAL MATTERS

To date, the Company has not been required to perform any investigation or
cleanup activities, nor has it been subject to any environmental claims. Because
the Company has suspended its loan origination business, it does not foresee any
risks involved in investigating and cleaning up hazardous or toxic substances on
properties acquired.

ADMINISTRATIVE SERVICES AGREEMENT

The Company entered into an Administrative Services Agreement (the "Agreement")
with AEGIS Mortgage Corporation ("AEGIS") to assume responsibility for
accounting and administrative activities effective September 1, 1999. The
Company pays administrative fees of $90,000 per month under the terms of the
Agreement. The Agreement is effective until terminated by either party. AEGIS
shall be required to give the Company a minimum of ninety (90) days prior
written notice of termination and the Company shall be required to give AEGIS a
minimum of thirty (30) days written notice prior to termination.

EMPLOYEES

As a result of the Company's emergence from Chapter 11, the Company has only one
full time employee whose primary responsibility is to direct the future of the
Company, safeguard the Company's assets, and settle remaining bankruptcy claims.
Certain employees from AEGIS have been assigned to assist in these
responsibilities, and, as such, their salaries and related benefits have been
charged to the Company at cost. These expenses are in addition to the fees paid
under the terms of the Agreement.

ITEM 2.  PROPERTIES

The Company's executive office is located at 11111 Wilcrest Green, Suite 250 in
Houston, Texas. The Company's office space is shared with AEGIS Mortgage
Corporation, and rental expense is included in the monthly administrative
services expense.

                                       6
<PAGE>
ITEM 3.  LEGAL PROCEEDINGS

      CEASAR ACTION. On or about September 29, 1997, a putative class action
lawsuit (the "Ceasar Action") was filed against the Company and two of its
former officers and directors in the United States District Court for the
Eastern District of New York (the "Eastern District") on behalf of all
purchasers of the Company's common stock during the period from April 1, 1997
through August 15, 1997. Between approximately October 14, 1997 and December 3,
1997, nine additional class action complaints were filed against the same
defendants, as well as certain additional former Company officers and directors.
Four of these additional complaints were filed in the Eastern District and five
were filed in the United States District Court for the Southern District of New
York (the "Southern District"). On or about October 28, 1997, the plaintiff in
the Ceasar Action filed an amended complaint naming three additional former
officers and directors as defendants. The amended complaint in the Ceasar Action
also extended the proposed class period from November 4, 1996 through October
22, 1997. The longest proposed class period of any of the complaints is from
April 1, 1996 through October 22, 1997. On or about February 2, 1998, an
additional lawsuit brought on behalf of two individual investors, rather than on
behalf of a putative class of investors, was filed against the Company and
certain of its former officers and directors in federal court in New Jersey (the
"New Jersey Action").

      In these actions, plaintiffs allege that the Company and its former senior
officers engaged in securities fraud by affirmatively misrepresenting and
failing to disclose material information regarding the lending practices of the
Company's UK subsidiary, and the impact that these lending practices would have
on the Company's financial results. Plaintiffs allege that certain public
filings and press releases issued by the Company were false or misleading. In
each of the putative class action complaints, plaintiffs have asserted
violations of Section 10(b) and Section 20(a) of the Securities Exchange Act of
1934, as amended. Plaintiffs seek unspecified damages, including pre-judgment
interest, attorneys' and accountants' fees and court costs.

      In December 1997, the Eastern District plaintiffs filed a motion for
appointment of lead plaintiffs and approval of co-lead counsel. On September 23,
1998, the court granted this motion. On March 25, 1998, the Company and its
former officers and directors who were defendants filed a motion with the
federal Judicial Panel for Multidistrict Litigation ("JPML"), seeking
consolidation of all current and future securities actions, including the New
Jersey Action, for pre-trial purposes before Judge Sterling Johnson in the
Eastern District. On June 12, 1998, the JPML granted this motion. As a result of
the Company's Chapter 11 proceedings, the action against the Company was
discharged when the Company's plan of reorganization became effective on July 1,
1999. The action is still pending against the individual defendants.

      WALSH ACTION. In January 1998, the Company commenced a breach of contract
action in the Southern District against Walsh Securities, Inc. ("Walsh"). The
action alleges that Walsh breached certain obligations that it owed to the
Company under an agreement whereby Walsh sold mortgage loans to the Company. The
Company claims damages totaling in excess of $11.9 million. In March 1998, Walsh
filed a motion to dismiss, or, alternatively, for summary judgment. In May 1998,
the Company served papers that opposed Walsh's motion and moved for summary
judgment as to certain of the loans. In December 1998, Judge Stein of the
Southern District denied Walsh's motion to dismiss, or, alternatively, for
summary judgment with respect to all but 69 of the loans at issue in the
litigation. With respect to those 69 loans, Judge Stein granted Walsh's motion
and dismissed the loans from the litigation. At that time, Judge Stein also
denied

                                       7
<PAGE>
the Company's motion for summary judgment. On February 1, 1999, Judge Stein
denied the Company's motion for reconsideration of that part of his December
1998 order which granted Walsh's motion to dismiss with respect to 69 of the
loans at issue. The parties completed all discovery by the early summer of 1999,
and then filed cross-motions for summary judgment. The Company moved for Partial
Summary Judgment on 32 loans that were part of a fraudulent pyramid scheme in
New Jersey and that Walsh warranted under the parties' agreement as being "true
and correct in all material respects." Walsh, in turn, moved for summary
judgment on all of the loans remaining in the case, claiming that the Company
had waived its right to sue on all loans. The parties completed the briefing on
both motions on October 22, 1999, and do not expect the Court to rule until some
time in 2000.

      GLOBAL MORTGAGE ACTION. In August 1998, the Company filed a lawsuit in the
Circuit Court for Baltimore City, Maryland entitled Cityscape Corp et. al. v.
Global Mortgage et. al. (the "Global Mortgage Action") against various
defendants seeking damages for losses resulting from the Company's acquisition
in 1995 and 1996 of 145 fraudulent residential mortgages on inner city Baltimore
rowhouses. The complaint, as amended, seeks $5.5 million in compensatory damages
and unspecified punitive damages against the mortgage broker and its principals,
the title company and its principals, the settlement attorney, and the
appraisers, based on theories of negligence, malpractice, conspiracy and fraud.
The Company recently consummated settlements with all but two of the defendants
in this case, and it has now confirmed agreements in principle to settle with
those two remaining defendants. Trial has been postponed indefinitely, pending
execution of appropriate settlement agreements between the Company and the last
two defendants. Once the last two settlement agreements are executed, the trial
will be cancelled and this matter will be concluded.

      ELLIOTT ASSOCIATES ACTION. In September 1998, Elliott Associates, L.P. and
Westgate International, L.P. filed a lawsuit against the Company and certain of
its former officers and directors in the Southern District (the "Elliott
Associates Action"). In the complaint, plaintiffs described the lawsuit as "an
action for securities fraud and breach of contract arising out of the private
placement, in September 1997, of the Series B Preferred Stock of Cityscape."
Plaintiffs alleged violations of Section 10(b) of the Exchange Act (Count I);
Section 20(a) of the Exchange Act (Count II); and two breach of contract claims
against the Company (Counts III & IV). Plaintiffs alleged to have purchased a
total of approximately $20 million of such preferred stock. Plaintiffs sought
unspecified damages, including pre-judgment interest, attorneys' fees and other
expenses and court costs. The Company and its former officers and directors who
were defendants moved to dismiss the action. The action against the Company was
discharged when the Company's plan of reorganization became effective on July 1,
1999. The action against the remaining defendants has been settled and
dismissed.

      SIMPSON ACTION. In February 1998, a putative class action lawsuit was
filed against the Company in the U.S. District Court for the Northern District
of Mississippi (Greenville Division) (the "Simpson Action"). The Simpson Action
is a class action brought under the anti-kickback provisions of Section 8 of the
Real Estate Settlement Procedures Act ("RESPA"). The complaint alleges that, on
November 19, 1997, plaintiff Laverne Simpson, through the services of Few
Mortgage Group ("Few"), a mortgage broker, obtained refinancing for the mortgage
on her residence in Greenville, Mississippi. Few secured refinancing for
plaintiff through the Company. In connection with the financing, the Company is
alleged to have paid a premium to Few in the amount of $1,280.00. Plaintiff
claims that the payment was a referral fee and duplicate payment prohibited
under Section 8 of RESPA. Plaintiff is seeking compensatory damage for the
amounts "by which the interest rates and points charged were inflated."
Plaintiff also claims to represent a

                                       8
<PAGE>
class consisting of all other persons similarly situated, that is persons (i)
who secured mortgage financing from the Company through mortgage brokers from an
unspecified period to date (claims under Section 8 of RESPA are governed by a
one year statute of limitations) and (ii) whose mortgage brokers received a fee
from the Company. Plaintiff is seeking to recover compensatory damages on behalf
of the putative class, which is alleged to be "numerous," for the amounts that
"the interest rates and points charges were inflated" in connection with each
class member's mortgage loan transaction. The Company answered the complaint and
plaintiff has not yet moved for class certification. To date, there has not been
a ruling on the merits of either plaintiff's individual claim or the claims of
the putative class. As a result of the Company's Chapter 11 proceedings and the
plaintiff's failure to file a claim before the established bar date, plaintiff's
claims against the Company were discharged.

      PEAKS ACTION. In April 1998, the Company was named as a defendant in an
amended complaint filed against 59 separate defendants in the Circuit Court for
Baltimore City, Maryland entitled Peaks v. A Home of Your Own, Inc., et. al.
(the "Peaks Action"). This action, which was originally styled as a class
action, was later amended to drop the class allegations and instead joined 80
separate individual plaintiffs. The complaint alleges various causes of action
(including Conspiracy to Defraud, Fraud, Violation of Maryland Consumer
Protection Act and Unfair Trade Practices, Negligent Misrepresentation and
Negligence) relating to 89 allegedly fraudulent residential mortgages on
properties in inner city Baltimore. The Company is alleged to have purchased
(and still own) at least eight of the loans and may have previously purchased
and subsequently sold an additional seven of the loans. Due to the Company's
prior bankruptcy and an agreement with plaintiff's counsel, the Company has
never formally responded to the Amended Complaint and has not participated
formally in any discovery. The Company has, however, monitored the proceedings
in this case and has participated in settlement discussions. The Company
recently reached an agreement to settle this matter in exchange for mutual
releases and the payment to the Company of a percentage of a settlement pool
established for this purpose. In addition to the proceeds of the settlement
pool, the Company anticipates certain additional recoveries from the proceeds of
the refinancing or sale of the collateral securing the loans. As a result of the
Company's Chapter 11 proceedings and the plaintiff's failure to file a claim
before the established bar date, plaintiff's claims against the Company were
discharged.

      Although no assurance can be given as to the outcome of the unresolved
lawsuits described above, the Company believes that the allegations against the
Company in each of the actions are without merit and that the Company's
disclosures were proper, complete and accurate. The Company intends to defend
vigorously against these actions and seek their early dismissal. If the lawsuits
against the Company are decided in favor of the plaintiffs, however, it could
have a material adverse effect on the Company's consolidated financial position
and results of operations.

      REGULATORY MATTERS. In April and June 1996, CSC-UK acquired J&J Securities
Limited (the "J&J Acquisition") and Greyfriars Group Limited (formerly known as
Heritable Finance Limited) (the "Greyfriars Acquisition"), respectively. In
October 1996, the Company received a request from the staff of the Securities
and Exchange Commission (the "Commission") for additional information concerning
the Company's voluntary restatement of its financial statements for the quarter
ended June 30, 1996. The Company initially valued the mortgage loans in the J&J
Acquisition and the Greyfriars Acquisition at the respective fair value which
were estimated to approximate par (or historical book value). Upon the
subsequent sale of the mortgage portfolios, the Company recognized the fair
value of the mortgage servicing receivables retained and recorded a
corresponding gain for the fair value of such mortgage servicing

                                       9
<PAGE>
receivables. Upon subsequent review, the Company determined that the fair value
of such mortgage servicing rights should have been included as part of the fair
value of the mortgage loans acquired as a result of such acquisitions. The
effect of this accounting change resulted in a reduction in reported earnings of
$26.5 million. Additionally, as a result of this accounting change, the goodwill
initially recorded in connection with such acquisitions was reduced resulting in
a reduction of goodwill amortization of approximately $496,000 from the
previously reported figure for the second quarter. On November 19, 1996, the
Company announced that it had determined that certain additional adjustments
relating to the J&J Acquisition and the Greyfriars Acquisition should be made to
the financial statements for the quarter ended June 30, 1996. These adjustments
reflect a change in the accounting treatment with respect to restructuring
charges and deferred taxes recorded as a result of such acquisitions. This
caused an increase in the amount of goodwill recorded which resulted in an
increase of amortization expense as previously reported in the second quarter of
1996 of $170,692. The staff of the Commission has requested additional
information from the Company in connection with the accounting related to the
J&J Acquisition and the Greyfriars Acquisition. The Company is supplying such
requested information. In mid-October 1997, the Commission authorized its staff
to conduct a formal investigation which, to date, has continued to focus on the
issues surrounding the restatement of the financial statements for the quarter
ended June 30, 1996. The Company is continuing to cooperate fully in this
matter, however, the Commission has not contacted the Company on this matter
since July 1999.

      As a result of its negative operating results, the Company received
inquiries in 1998 from the State of New York Department of Banking regarding the
Company's qualifications to continue to hold a mortgage banking license. In
connection with such inquiries, the Company agreed to provide the banking
department with certain information and to certain restrictions on its business.
The Company provided the necessary information and complied with the
restrictions on its business through July 29, 1999, when the Company voluntarily
surrendered its New York mortgage banking licenses. After that date, the Company
no longer conducted any mortgage banking activities in New York and therefore
ceased submitting information to the banking department.

      UK SALE AGREEMENT. On September 4, 1998, CSC-UK commenced proceedings in
the High Court of Justice, London against Ocwen for the payment of certain sums
due under the UK Sale Agreement (the "Proceedings"). Although Ocwen initially
informed CSC-UK that it would defend the Proceedings, Ocwen then satisfied
CSC-UK's claim by paying CSC-UK (pound)1.7 million ($2.8 million) on November
24, 1998. Prior to CSC-UK initiating the Proceedings, Ocwen informed CSC-UK that
it would defend the (then proposed) Proceedings on the basis that any sums owed
by Ocwen to CSC-UK should be set off or extinguished against a sum which Ocwen
claimed was due or, alternatively, was recoverable by it from CSC-UK on the
grounds of CSC-UK's breach of warranty or misrepresentation with respect to
matters concerning loans of Greyfriars (the "Alleged Loan Liabilities"). With
respect to the Alleged Loan Liabilities, Ocwen claimed that CSC-UK had
excessively charged borrowers, failed to notify borrowers of interest rate
increases and failed to advise borrowers of increased repayments. Ocwen claimed
that these liabilities totaled approximately (pound)13.0 million ($21.2
million). Additionally, pursuant to the UK Sale Agreement, Ocwen held back a sum
of (pound)3.5 million ($5.7 million) with respect to the purchase price, pending
the determination of certain other figures under the UK Sale Agreement (the
"Holdback"), which sum was paid into a Holdback account at the time of the UK
Sale Agreement.

      On February 15, 1999, the Company, Ocwen and certain of their subsidiaries
entered into a settlement agreement, in full and final settlement of all causes
of action, claims, demands, liabilities,

                                       10
<PAGE>
damages, costs, charges and expenses that the Company, CSC-UK and Ocwen and
their respective subsidiaries may have against each other. Such claims include
Ocwen's alleged claim against the Company and/or CSC-UK with respect to the
Alleged Loan Liabilities. Under the settlement agreement, in June 1999 CSC-UK
was paid $3.1 million from the Holdback account, and Ocwen was paid
approximately $2.6 million from the Holdback account. The Bankruptcy Court
approved the settlement agreement.

      In the normal course of business, aside from the matters discussed above,
the Company is subject to various legal proceedings and claims, the resolution
of which, in management's opinion, will not have a material adverse effect on
the consolidated financial position or the results of operations of the Company.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

During the fourth quarter of 1999, there were no matters submitted to a vote by
the security holders through solicitation of proxies or otherwise.

                                       11
<PAGE>
                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
         MATTERS

As of December 31, 1999, the Company had 25,000,000 shares of $.01 par value
common stock (the "Reorganized Common Stock") authorized. Pursuant to the
Amended Plan, 7,743,622 shares have been issued through December 31, 1999.
Issuances of certain shares of the Reorganized Common Stock have not been
completed pending the resolution of legal proceedings. Shares of the Reorganized
Common Stock are not currently publicly traded.

All of the Predecessor Company's common and preferred stock, warrants and stock
options were canceled at the reorganization on July 1, 1999. During fiscal year
1999, Nasdaq delisted the Predecessor Company's common stock.

As of March 27, 2000, the Company had approximately 1,400 stockholders of record
of the Company's Reorganized Common Stock.

Neither Cityscape nor AMC has ever paid any cash dividends on its common stock
and AMC does not anticipate paying cash dividends in the foreseeable future.

ITEM 6.  SELECTED FINANCIAL DATA

The selected data presented below under the captions "Selected Statement of
Operations Data" and "Selected Balance Sheet Data" for and as of, the six months
ended December 31, 1999 and June 30, 1999, and for each of the years in the
four-year period ended December 31, 1998, are derived from the consolidated
financial statements of AMC Financial, Inc., which financial statements have
been audited by KPMG LLP, independent certified public accountants. The
consolidated financial statements as of December 31, 1999 and 1998, and for the
six months ended December 31, 1999 and June 30, 1999 and for each of the years
in the two-year period ended December 31, 1998, and the independent auditors'
report thereon, are included elsewhere herein.

In accordance with the American Institute of Certified Public Accountants'
Statement of Position 90-7, "Financial Reporting by Entities in Reorganization
Under the Bankruptcy Code," the Company adopted fresh start accounting as of
June 30, 1999. See Notes to Consolidated Financial Statement Note 3. - Fresh
Start Reporting or Item 1. Business-Fresh Start Reporting. In accordance with
fresh start reporting a black line has been placed to separate the operating
results of the Predecessor Company from those of the Reorganized Company, since
they are not prepared on a comparable basis.

                                       12
<PAGE>
                      AMC FINANCIAL, INC. AND SUBSIDIARIES
                      (FORMERLY CITYSCAPE FINANCIAL CORP.)
                      SELECTED CONSOLIDATED FINANCIAL DATA
                    (IN THOUSANDS, EXCEPT FOR PER SHARE DATA)

<TABLE>
<CAPTION>
                                     REORGANIZED
                                       COMPANY                         PREDECESSOR COMPANY
                                     -----------  -----------------------------------------------------------------
                                     SIX MONTHS    SIX MONTHS                 YEARS ENDED DECEMBER 31,
                                       ENDED         ENDED       --------------------------------------------------
                                     DECEMBER       JUNE 30,
                                     31, 1999         1999         1998          1997           1996         1995
                                     -----------   ---------     ---------     ---------     ---------    ---------
<S>                                  <C>           <C>           <C>           <C>           <C>          <C>
SELECTED STATEMENT OF
  OPERATIONS DATA:
  Revenues:
   (Loss) gain on sale of loans..    $     (75)    $   4,609     $     128     $  83,365     $  76,820    $  26,305
   Net realized loss on valuation
     of residuals ...............         --         (20,847)      (68,847)     (148,004)         --           --
   Mortgage origination income ..         --            --           2,238         4,849         2,812        2,751
   Interest .....................        1,970         3,328        14,363        73,520        24,535        6,110
   Other ........................        2,647         7,660         1,454        20,302         3,681        1,306
                                     ---------     ---------     ---------     ---------     ---------    ---------
        Total revenues ..........        4,542        (5,250)      (50,664)       34,032       107,848       36,472
  Expenses:
   Salaries and expenses ........          288         2,857        28,744        41,089        26,288       10,861
   Other costs and expenses .....        1,017         8,701       109,425       129,526        38,360       11,080
                                     ---------     ---------     ---------     ---------     ---------    ---------
        Total expenses ..........        1,305        11,558       138,169       170,615        64,648       21,941
   Earnings (loss) from
     continuing operations
     before reorganization
     items, income taxes,
     and extraordinary item .....        3,237       (16,808)     (188,833)     (136,583)       43,200       14,531
  Reorganization items ..........         --           1,644        31,879          --            --           --
                                     ---------     ---------     ---------     ---------     ---------    ---------
   Earnings (loss) from
     continuing operations
     before income taxes
     and extraordinary item .....        3,237       (18,452)     (220,712)     (136,583)       43,200       14,531
  Income tax provision (benefit)         1,133            68            38       (18,077)       19,325        6,410
                                     ---------     ---------     ---------     ---------     ---------    ---------
   Earnings (loss) from
     continuing operations
     before extraordinary
     item .......................        2,104       (18,520)     (220,750)     (118,506)       23,875        8,121
  Extraordinary item (1) ........         --         416,095          --            --            --           (296)
                                     ---------     ---------     ---------     ---------     ---------    ---------
   Earnings (loss) from
     continuing operations ......        2,104       397,575      (220,750)     (118,506)       23,875        7,825
  Discontinued operations:
    (Loss) earnings from
      discontinued operations, net
      of income tax (benefit)
      provision, and net of
      extraordinary item ........         (500)         --            --        (245,906)       26,806        3,750
   Loss on disposal of
     discontinued operations ....         --            --            --         (49,940)         --           --
                                     ---------     ---------     ---------     ---------     ---------    ---------
  Net earnings (loss) ...........        1,604       397,575      (220,750)     (414,352)       50,681       11,575
  Preferred stock dividends
    paid in common stock ........         --            --            --             905          --           --
  Preferred stock - increase in
    liquidation preference ......         --            --           6,278           917          --           --
  Preferred stock - default
    payments ....................         --            --          14,049          --            --           --
  Preferred stock - beneficial
    discount ....................         --            --            --           2,725          --           --
                                     ---------     ---------     ---------     ---------     ---------    ---------

  Net earnings (loss)
    applicable to common
    stockholders ................    $   1,604     $ 397,575     $(241,077)    $(418,899)     $  50,681    $  11,575
                                     =========     =========     =========     =========     =========    =========
Earnings (loss) per common share:
  Basic and Diluted:
   Continuing operations ........    $    0.31
   Discontinued operations ......        (0.07)            *             *             *             *            *
                                     ---------
   Net earnings .................    $    0.24             *             *             *             *            *
                                     =========
Weighted average number of
  common shares: ................                          *             *             *             *            *
  Basic and Diluted .............        6,790             *             *             *             *            *
                                     =========
</TABLE>

                                       13
<PAGE>
<TABLE>
<CAPTION>
                              REORGANIZED
                                COMPANY                    PREDECESSOR COMPANY
                              ------------ --------------------------------------------------
                                                              DECEMBER 31,
                              DECEMBER 31, --------------------------------------------------
                                1999         1998          1997          1996         1995
                              ---------    ---------     ---------     ---------    ---------

<S>                           <C>          <C>           <C>           <C>          <C>
SELECTED BALANCE SHEET DATA:
Total assets .............    $  73,095    $ 209,338     $ 394,002     $ 663,841    $ 135,946
Mortgage servicing
  receivables, net .......         --           --           4,969        40,068        3,436
Residual certificates ....       12,538       33,661       126,476       103,200       15,571
Mortgage loans held for
  sale, net ..............       14,338      123,346        93,290        88,127       73,852
Investment in discontinued
  operations, net ........       12,239       13,008        84,232       212,590       26,832
Total debt(2) ............         --        105,969       507,099       335,479       72,942
Liabilities subject to
  compromise .............         --        477,424          --            --           --
Total liabilities ........        9,651      606,913       570,827       525,009       78,849
Total stockholders'
  equity (deficit) .......       63,444     (397,575)     (176,825)      138,832       57,099

</TABLE>
(1)   Represents the discharge of pre-petition liabilities, net of tax for the
      six months ended June 30, 1999, and a loss, net of taxes, related to the
      early extinguishment of subordinated debentures in December 1995.

(2)   Includes short-term borrowings due under warehouse facilities.

*     Per share amounts are not meaningful due to reorganization.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

The following discussion should be read in conjunction with the consolidated
financial statements of the Company and accompanying notes elsewhere herein. The
following Management's Discussion and Analysis of Financial Condition and
Results of Operations contains forward-looking statements which involve risks
and uncertainties. The Company's actual results could differ materially from
those anticipated in these forward-looking statements. The Company undertakes no
obligation to release publicly any revisions to these forward-looking statements
to reflect events or circumstances after the date hereof or to reflect the
occurrence of anticipated or unanticipated events.

OVERVIEW OF CURRENT AND PREVIOUS BUSINESS

Since the approval of the Amended Plan, the Company has concentrated on
investing funds in high-grade commercial paper and formulating alternatives for
the future of the Company. The Company has engaged an investment advisor to
assist in determining the direction of the Company. The Company has transferred
all servicing rights or established subservicing relationships with third
parties. Since the reorganization, the Company's main revenue stream has been
interest earned from investing funds and from loans held for sale. The Company
has also recognized revenue from the sale of its servicing advances. Prior to
the reorganization, Cityscape recognized a substantial portion of its revenue
from the sale of loans through securitizations and whole loan sales to
institutional purchasers, origination fees and excess mortgage servicing
receivables and fees earned on loans serviced.

With the reorganization, the direction of the Company has changed significantly.
Revenue streams in previous years are not comparable with the current year
revenues and as such no comparative tables are presented.

                                       14
<PAGE>
DISCONTINUED OPERATIONS

Cityscape commenced operations in the United Kingdom in May 1995 with the
formation of CSC-UK, an English corporation that originated, sold and serviced
loans in England, Scotland and Wales. Cityscape initially held a 50% interest
and subsequently purchased the remaining 50% in CSC-UK. CSC-UK had no operations
and no predecessor prior to May 1995.

As a result of liquidity constraints, Cityscape adopted a plan in March 1998 to
sell the assets of CSC-UK. In April 1998, Cityscape completed the sale to Ocwen
Financial Corporation and Ocwen Asset Investment Corp. of substantially all of
the assets and certain liabilities of CSC-UK. As a result, Cityscape received
proceeds, at the time of closing, of $83.8 million, net of closing costs and
other fees. During 1998, Cityscape received $4.5 million related to loan
portfolio adjustments and in 1999 received an additional $3.1 million in
settlement of the assumed liabilities at the close of sale.

Accordingly, the operating results of CSC-UK and its subsidiaries have been
segregated from continuing operations and reported as a separate line item on
the Company's consolidated financial statements. In addition, net assets of
CSC-UK have been reclassified on the Company's consolidated financial statements
as investment in discontinued operations. The Company restated its 1996
consolidated financial statements to present operating results of CSC-UK as a
discontinued operation.

As of December 31, 1999, the Company's net investment in discontinued operations
totaled $12.2 million, representing cash on hand in the discontinued operations
of approximately $11.9 million and net receivables (net of liabilities) due of
approximately $307,000. The Company recorded loss on discontinued operations of
$500,000, net of income tax benefit of $269,000, in 1999 due to an increase in
an allowance against an income tax receivable and an increase in potential
liabilities. The Company expects to maintain a balance of cash on hand in the
discontinued operations to cover existing and potential liabilities and costs
until dissolution of the existing legal entities of CSC-UK and its subsidiaries.

                                       15
<PAGE>
RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998

THE RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1999 INCLUDE THE
COMBINED RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED DECEMBER 31, 1999 FOR
THE REORGANIZED COMPANY AND THE COMBINED RESULTS OF OPERATIONS FOR THE SIX
MONTHS ENDED JUNE 30, 1999 FOR THE PREDECESSOR COMPANY. THE COMPANY ADOPTED
FRESH START REPORTING IN ACCORDANCE WITH SOP 90-7 EFFECTIVE JUNE 30, 1999.
THEREFORE, THE OPERATING RESULTS PRESENTED FOR THE SIX MONTHS ENDED JUNE 30,
1999 AND DECEMBER 31, 1999 ARE NOT COMPARABLE TO FISCAL YEAR 1998.

For 1999 the Company recorded negative revenues of $708,000 primarily as a
result of recording a loss on valuation of residual certificates of $20.8
million. This represents a $50.0 million increase in revenues from 1998
primarily due to a lower loss on valuation of residuals and an increase in the
gain on the sale of loans. Offsetting the increased revenues in 1999 as compared
to 1998 was a decrease in interest income and no mortgage origination income
since loan origination activities were discontinued in November 1998. In 1999
the Company recorded a gain on the sale of loans of $4.5 million primarily due
to the recognition of $7.0 million related to the Company's profit participation
on loans previously sold into the Company's purchase facility, offset by the
sale of $106.6 million of loans sold at a net loss of $2.4 million. Gain on the
sale of loans for 1998 totaled $128,000 which represents the spread of 0.03% on
the difference between the average net premium received as compared to the
premium paid on the sale of $414.2 million of whole loan sales.

For the year ended December 31, 1999 the Company recorded a loss on valuation of
residuals of $20.8 million. The loss on valuation was recorded in the second
quarter of 1999 and utilized a loss rate of 3.0%-10.0% per annum and a loss rate
of 7.3% - 33.0% per annum on its Sav*-A-Loan(R) and home equity securitizations,
respectively. The Company used a constant prepayment rate of 19.0% on its
Sav*-A-Loan(R) securitizations and 30.0% on its home equity securitizations. The
Company used a discount rate of 20.0% on its home equity securitizations and
Sav*-A-Loan(R) securitizations. At the end of fiscal year 1999, the Company
utilized loss rates ranging from 3.0% to 8.0% per annum on its Sav*-A-Loan(R)
securitizations and a discount rate of 20.0%. The Company used a constant
prepayment rate of 19.0% for valuing Sav*-A-Loan(R) securitizations. The
valuation of the Sav*-A-Loan(R) securitizations at the end of 1999 resulted in
an unrealized gain of $96,500 ($63,000, net of taxes), which was considered to
be a temporary gain and was therefore recorded in accumulated other
comprehensive income. The home equity securitizations were considered to have no
value at the end of 1999. In 1998, the Company recorded a loss on valuation of
residuals totaling $68.8 million consisting of $42.9 million for home equity
securitizations and $25.9 million for Sav*-A-Loan(R) securitizations. At the end
of 1998, the Company used a discount rate of 20.0% to value both securitizations
and loss rates of 7.5% and 4.5% per annum for home equity securitizations and
Sav*-A-Loan(R) securitizations, respectively. At the end of 1998, the Company
used a 30.0% and 16.8% constant prepayment rate on home equity securitizations
and Sav*-A-Loan(R) securitizations, respectively.

In November 1998 the Company indefinitely suspended its loan origination
activity and therefore no mortgage origination income was recorded in 1999.
During 1998, the Company recorded mortgage origination income of $2.2 million.

                                       16
<PAGE>
Interest income decreased $9.1 million or 63.1% to $5.3 million for the year
ended December 31, 1999 as compared to $14.4 million for the comparable period
in 1998. Since the Company's reorganization at July 1, 1999, the Company's
primary source of interest income has been from investments in high-grade
commercial paper. Until November 1998, when the Company ceased loan origination
and purchase activity, a substantial portion of interest income was derived from
mortgages held for sale. The Company recognized accreted interest on residuals
until the residuals were devalued in the second quarter of 1998.

Other income was $10.3 million for the year ended December 31,1999 as compared
to $1.5 million for the year ended December 31, 1998. During the second quarter
of 1999, the Company transferred its servicing rights on all home equity
securitizations to Ocwen FSB and received cash of $14.4 million (on the transfer
of its 95-2, 95-3, 96-1, 96-2, 96-3 and 96-4 home equity securitizations)
resulting in a gain of $6.1 million. The gain represents amounts received in
excess of the Company's carrying value of servicer advances. Servicer advances
represent claims against the securitization trusts for reimbursement of advances
made to such trusts by the Company as servicer.

Total expenses decreased $125.3 million, or 90.7%, to $12.9 million in 1999 from
$138.2 million in 1998. The decrease was primarily due to the suspension of loan
origination and purchase activities and the corresponding reduction in the
Company's workforce. In 1998 the Company recorded restructuring charges of $3.2
million as compared to $790,000 in 1999 and 1998 expenses included a $2.0
million charge relating to the settlement of a lawsuit.

Salaries and benefits decreased $25.6 million, or 88.9%, to $3.1 million in 1999
from $28.7 million in 1998. As of December 31, 1999 the Company employed only
one full time employee as compared to 70 at the end of 1998. The Company
incurred salary and related benefits expense on former Cityscape employees
through June 30, 1999, at which time the remaining employees were terminated.

Interest expense decreased 97.0% from $46.4 million in 1998 to $1.4 million in
1999. The decrease is primarily due to the Company's cessation of accruing
interest on the Convertible Debentures and Notes as of October 6, 1998 due to
the Company's bankruptcy filing. In November 1998 the Company indefinitely
suspended all loan origination and purchase activities and during the second
quarter of 1999 the Company paid off all warehouse related financing.

Selling and other operating expenses decreased $44.0 million, or 85.4%, to $7.5
million for the year ended December 31, 1999 from $51.5 million for the
comparable period in 1998. The decrease primarily reflects the Company's
suspension of origination and purchase activities, closing branch operations and
related reduction in the workforce. In 1998 the Company incurred increased
professional fees as a result of the Company's restructuring efforts and
recorded a $2.0 million charge for the settlement of a lawsuit.

There were no provisions for loan losses recorded during 1999 as compared to
$8.3 million in 1998.

Restructuring charges totaled $790,000 for the year ended December 31, 1999 as
compared to $3.2 million for the same period in 1998. Restructuring charges
provided for in 1998 included $1.1 million for severance payments and $2.1
million for future lease obligations and the write off of assets no longer in
service. The charges for 1999 are a result of the Company's move from Elmsford,
New York to Houston, Texas.

                                       17
<PAGE>
The Company recorded reorganization expenses of $1.6 million during the year
ended December 31, 1999 as compared to $31.9 million for the year ended December
31, 1998. Reorganization expenses for the year ended December 31, 1999 consisted
primarily of professional fees incurred. Reorganization expenses incurred during
the year ended December 31, 1998 related to the Company's decision to cease loan
origination and purchase activities in November 1998. The expenses in the year
ended December 31, 1998 included $3.9 million in severance payments, $5.3
million in lease obligations and write-off of assets no longer in service, $10.7
million in professional and other fees related to the reorganization and $12.0
million for the write-off of the deferred debt issuance costs related to the
Notes and Convertible Debentures.

During 1999, the Company recorded a loss on discontinued operations resulting
from an increase in an allowance against the income tax receivable and an
increase in potential liabilities for CSC-UK and its subsidiaries.

Net earnings applicable to common stockholders increased to $399.9 million for
the year ended December 31, 1999 from a net loss applicable to common stock of
$241.1 million for the comparable period in 1998. Included in the net earnings
applicable to common stock is an extraordinary item of $416.1 million which
represents the gain from the discharge of pre-petition liabilities, net of
taxes. In 1998 there was an increase in the liquidation preference of the
preferred stock in lieu of dividends and default payments of $20.3 million.

YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997

During 1998, the Company recorded negative revenues of $50.7 million primarily
as a result of recording a $68.8 million loss on valuation of the Company's
residual interest in securitization which were in the form of residual
certificates. This represented an $84.7 million decrease in revenues from 1997
primarily also as a result of decreased gain on sale of loans, interest income,
and other income which included an $18.0 million gain on sale of
available-for-sale securities during 1997.

For 1998, the Company recorded a gain on sale of loans totaling $128,000. This
gain was due primarily to the sale of $414.2 million of whole loans at an
average net premium received of 0.81% as compared to the average premium paid on
such loans of 0.78%. For 1997, gain on sale of loans also included gain on
securitization representing the fair value of the residual certificates that the
Company received upon the sale of loans through securitizations. During 1997,
the Company recognized $83.4 million of gain on sale of loans representing a
weighted average gain of 5.1% on $1.6 billion of loans sold.

During 1998, the Company recorded a loss on valuation of residuals of $68.8
million, consisting of $42.9 million loss on its home equity residuals and $25.9
million on its Sav*-A-Loan(R) residuals. This loss on valuation of residuals was
primarily a result of (i) the Company increasing the discount rate used to value
its residuals to 20.0% at December 31, 1998 from 15.0% at December 31, 1997 for
both its home equity and Sav*-A-Loan(R) securitizations and (ii) an increase in
the loss rates from 1.7% per annum at December 31, 1997 to 7.5% per annum at
December 31, 1998 for its home equity securitizations and an increase from 3.1%
per annum at December 31, 1997 to 4.5% per annum at December 31, 1998 for its
Sav*-A-Loan(R) securitizations. As of December 31, 1998, the Company used a
30.0% constant prepayment rate on its home equity securitizations and 16.8%
prepayment rate on its Sav*-A-Loan(R) securitizations. The increase in the
discount rate reflects the changes in market conditions experienced in the
mortgage-backed securities

                                       18
<PAGE>
market since the second quarter of 1998. See Notes to Consolidated Financial
Statements Note 5. - Residual Certificates.

Mortgage origination income decreased $2.6 million or 54.2% to $2.2 million for
the year ended December 31, 1998 from $4.8 million for the comparable period in
1997. This decrease was due primarily to a lower volume of loan originations for
the year ended December 31, 1998 as compared to the same period in 1997.

Interest income decreased $59.1 million or 80.4% to $14.4 million for the year
ended December 31, 1998 from $73.5 million for the comparable period in 1997.
This decrease was due primarily to the cessation of the recognition of accreted
interest on the Company's residuals in the second quarter of 1998 as a result of
the devaluation of the residuals, as well as lower originations during 1998 and
lower weighted average coupons on the loans originated in 1998.

Other income decreased $18.8 million or 92.6% to $1.5 million in 1998 from $20.3
million in 1997. This decrease was due primarily to the inclusion in 1997 of
$18.0 million of gain on the sale of IMC Mortgage Company ("IMC") Common Stock
owned by the Company. Additionally, there was a decrease in servicing income of
$820,000 or 50.0% to $820,000 during 1998 from $1.6 million in 1997, due
primarily to the continued attrition of the loans that were sold with servicing
retained prior to the Company's adoption of Statement of Financial Accounting
Standards ("SFAS") No. 122, "Accounting for Mortgage Servicing Rights."

Total expenses decreased $32.4 million or 19.0% to $138.2 million in 1998 from
$170.6 million in 1997. This decrease was due primarily to lower salaries and
interest expense offset by increased other operating expenses relating to
increased professional fees as well as $3.2 million of restructuring charges and
$2.0 million relating to the settlement of a lawsuit.

Salaries and benefits decreased $12.4 million or 30.2% to $28.7 million in 1998
from $41.1 million in 1997. This decrease was due primarily to a reduction of
staffing levels to 70 employees as of December 31, 1998 as compared to 837
employees as of December 31, 1997. This decrease in employees was primarily a
result of the Company's reorganization efforts as well as employee attrition and
the Company's decision to suspend indefinitely all loan origination and purchase
activities.

Interest expense decreased $24.3 million or 34.4% to $46.4 million in 1998 from
$70.7 million in 1997. This decrease was due primarily to lower interest on
warehouse facility borrowings due to a lower average balance of loans in
inventory during 1998, the discontinuance in 1998 of the Company's interest rate
management strategy which resulted in higher interest expense and offsetting
interest income and in 1997 the recognition of $4.7 million in interest expense
related to the inducement of the Convertible Debentures.

Selling and other expenses increased $5.3 million or 11.5% to $51.5 million in
1998 from $46.2 million in 1997. This increase was due primarily to increased
other operating expenses of $5.0 million or 11.9% to $47.1 million in 1998 from
$42.1 million in 1997 resulting from increased professional fees as a result of
the Company's restructuring and streamlining efforts as well as a $2.0 million
charge due to the settlement of a lawsuit and increased foreclosure costs during
1998.

Provision for loan losses of $8.3 million was recorded for the year ended
December 31, 1998 as compared to $12.6 million for the year ended December 31,
1997. This decrease was due primarily to significantly

                                       19
<PAGE>
lower originations in 1998 ($456.8 million) as compared to 1997 ($1.6 billion)
resulting in a lower level of problem loans originated during 1998 and
correspondingly in a lower loan loss provision. This was offset by the fact that
a provision for losses was required against a higher portion of the loans held
for sale resulting from the deterioration of the market for such loans.

During 1998, the Company recorded a restructuring charge of $3.2 million. This
charge was related to a restructuring plan that included streamlining and
downsizing the Company's operations. During February 1998, the Company closed
its branch operation in Virginia and significantly reduced its correspondent
originations and exited its conventional lending business. Of the $3.2 million,
$1.1 million represents severance payments made to 142 former employees and $2.1
million represents costs incurred with lease obligations and write-offs of
assets no longer in service.

In addition to the restructuring charges of $3.2 million, reorganization items
of $31.9 million were recorded during 1998. As part of its reorganization plan
and the Company's decision to indefinitely suspend its loan origination and
purchase activities in November 1998, the Company reduced its workforce by 335
employees and closed its branch operations in California, Illinois, New York and
Georgia, while maintaining corporate and servicing offices in New York. Of this
amount, $3.9 million represented severance payments to 335 former employees,
$5.3 million incurred in connection with lease obligations and write-offs of
assets no longer in service, $10.7 million represented professional fees and
other miscellaneous items related to the reorganization and $12.0 million
represented the write-off of the deferred debt issuance costs related to the
Notes and Convertible Debentures which were classified as liabilities subject to
compromise at December 31, 1998.

For the year ended December 31, 1998, the Company recorded an income tax
provision of $38,000 as compared to an income tax benefit of $18.1 million for
the comparable period in 1997. The 1997 tax benefit of $18.1 million represents
refunds claimed by the Company from the tax loss carrybacks generated as a
result of net operating losses. As a result of additional net operating losses
recorded in 1998, the Company did not generate a federal tax liability during
this period. The Company's tax provision in 1998 reflects the State liabilities
incurred. See Notes to Consolidated Financial Statements Note 1. - Summary of
Significant Accounting Policies and Note 17. - Income Taxes.

For the year ended December 31, 1998, the Company recorded a loss on
discontinued operations of $245.9 million (See Notes to Consolidated Financial
Statements Note 4. - Discontinued Operations). The loss on discontinued
operations is net of an extraordinary item of $425,000, net of taxes. In
connection with the Company's agreement with a financing facility to buy all of
CSC-UK's loans, the Company paid certain fees evidenced by notes. Such notes
were paid before the due date. The fees were being amortized over the life of
the note and early extinguishment of the debt gave rise to an extraordinary
gain.

In March 1998, the Company adopted a plan to sell the assets of CSC-UK (See
Notes to Consolidated Statements Note 4. - Discontinued Operations). As a result
of this plan, the Company recorded a loss of $49.9 million on the disposal of
discontinued operations for the year ended December 31, 1997.

The Company recorded a net loss applicable to common stockholders of $241.1
million for the year ended December 31, 1998 as compared to net loss applicable
to common stockholders of $418.9 million in 1997. This loss was due primarily to
decreased loan originations which decreased gain on sale of loans without a
corresponding decrease in expenses. In addition, the Company's strategy of
selling loans through whole

                                       20
<PAGE>
loan sales instead of through securitizations decreased gain on the sale of
loans, as well as the recognition of unrealized losses on valuation of residuals
of $68.8 million during 1998.

LIQUIDITY AND CAPITAL RESOURCES

The Company's principal cash requirements include the payment of operating and
post-bankruptcy expenses. At December 31, 1999, the Company had cash and cash
equivalents aggregating $30,850,395, which represents an increase of $12,444,969
from the prior year. During the year ended December 31, 1999, the Company
generated $118,893,000 cash from continuing operations and used $105,969,355 in
financing activities. Since the adoption of the Amended Plan, the Company's
primary source of income has been interest income generated through the
investment of funds in high-grade commercial paper. Should the full funding of
the over-collateralization accounts in connection with the Company's
securitizations occur, the Company may receive cash payments on its residual
certificates related to its securitizations, although no assurance can be given
as to when or whether this will occur. Based upon the current and anticipated
levels of operations, the Company believes that the cash flow from operations
and available cash will be sufficient to meet the Company's anticipated
requirements for working capital through the next twelve months.

RESIDUAL CERTIFICATES

In the past, the Company sold loans through securitizations that had been
originated or purchased by the Company to a trust for a cash purchase price and
interests in such trusts were represented by residual certificates. A residual
certificate represents an interest in the trust which has no principal amount
and does not unconditionally entitle the holder to receive payments. A holder of
the residual certificate is entitled only to the remainder, if any, of the
interest cash flow from the mortgage loans sold to the trust after payment of
all other interests in such trust and as such bears the greatest degree of risk
regarding the performance of such mortgage loans.

To value the residual certificates, the Company uses available information
applicable to the types of loans in the securitization (giving consideration to
such risks as default and collection) such as reports on prepayment rates,
interest rates, collateral value, economic forecasts and historical default and
prepayment rates of the portfolio under review. The Company estimates the
expected cash flows to be received over the life of a portfolio of loans. These
expected cash flows constitute the excess of the interest rate payable by the
obligors of loans over the interest rate passed through to the purchaser, less
applicable recurring fees and credit losses. The Company discounts the expected
cash flows at a discount rate that it believes to be consistent with the
required risk-adjusted rate of return for an independent third party purchaser
of the residual certificates. At December 31, 1999 and 1998, the Company's
consolidated statements of financial position reflected the fair value of
residual certificates of $12.5 million and $33.7 million, respectively.

Realization of the value of residual certificates in cash is subject to the
prepayment and loss characteristics of the underlying loans and to the timing
and ultimate realization of the stream of cash flows associated with such loans.
If actual experience differs from the assumptions used in the determination of
the asset value, future cash flows and earnings could be negatively affected and
the Company could be required to write down the value of its residual
certificates. In addition, if prevailing interest rates rise, the required
discount rate might also rise, resulting in impairment of the value of the
residual certificates.

                                       21
<PAGE>
ACCOUNTING CONSIDERATIONS

A discussion of new accounting pronouncements and their impact on the
consolidated financial statements is provided in the Notes to Consolidated
Financial Statements Note 1. - Summary of Significant Accounting Policies.

IMPACT OF YEAR 2000

The Company has experienced no significant problems regarding Year 2000 ("Y2K").
The Company continues to monitor its internal systems to assure no issues arise.
The Company has not been notified of any Y2K problems by its loan servicers or
subservicers.

The Company incurred no additional costs associated with Y2K other than those
incurred in the normal course of business.

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is not currently subject to foreign currency exchange risk other
than liabilities associated with the discontinued operations. The Company does
not make use of off-balance sheet derivative instruments to control exchange
rate risk.

Interests the Company received upon loan sales through its securitizations are
in the form of residual certificates. Residual certificates do not have a stated
maturity or amortization period. The expected amount of the cash flow as well as
the timing is dependent on the performance of the underlying collateral
supporting each securitization. The actual cash flow of these instruments could
vary substantially if the performance is different from the Company's
assumptions. The Company generally develops its assumptions by analyzing past
portfolio performance, current loan characteristics and current market
conditions. The Company currently values the residual certificates using a
discount rate of 20%.

                                       22
<PAGE>
ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                          INDEX TO FINANCIAL STATEMENTS


                                                                           Page

AMC Financial, Inc. and Subsidiaries Consolidated Financial Statements:

     Independent Auditors' Report...........................................24

     Consolidated Statements of Financial Condition as of
        December 31, 1999 and 1998..........................................25

     Consolidated Statements of Operations for the six months ended
        December 31, 1999 and June 30, 1999, and the years ended
        December 31, 1998 and 1997..........................................26

     Consolidated Statements of Stockholders' Equity (Deficit) for
        the six months ended December 31, 1999 and June 30, 1999,
        and the years ended December 31, 1998 and 1997......................27

     Consolidated Statements of Cash Flows for the six months
        ended December 31, 1999 and June 30, 1999, and
        the years ended December 31, 1998 and 1997..........................29

     Notes to Consolidated Financial Statements.............................30

                                       23
<PAGE>
INDEPENDENT AUDITORS' REPORT


The Board of Directors and Stockholders
AMC Financial, Inc.:


We have audited the accompanying consolidated statements of financial condition
of AMC Financial, Inc., formerly Cityscape Financial Corp., and subsidiaries
(the Company) as of December 31, 1999 and 1998, and the related consolidated
statements of operations, stockholders' equity (deficit), and cash flows for the
six-month period ended December 31, 1999, the six-month period ended June 30,
1999, and each of the years in the two-year period ended December 31, 1998.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to report on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our report.

The accompanying consolidated financial statements for the six-month period
ended June 30, 1999, and for each of the years in the two-year period ended
December 31, 1998, were prepared assuming that the Company would continue as a
going concern. As further discussed in Note 2 to the consolidated financial
statements, the Company and its wholly owned subsidiary, Cityscape Corp., filed
a voluntary petition for reorganization under Chapter 11 of the United States
Bankruptcy Code on October 6, 1998. The reorganization plan was not confirmed by
the Bankruptcy Court until June 16, 1999. These factors raised substantial doubt
about the Company's ability to continue as a going concern. The consolidated
financial statements for each of the years in the two-year period ended December
31, 1998, do not include any adjustments that resulted from the outcome of these
uncertainties.

Because of the significance of the uncertainties discussed in the preceding
paragraph, we are unable to express, and we do not express, an opinion on the
accompanying consolidated financial statements for the six-month period ended
June 30, 1999, and for each of the years in the two-year period ended December
31, 1998.

In our opinion, the consolidated statement of financial condition of AMC
Financial, Inc. and subsidiaries as of December 31, 1999, and the related
consolidated statements of operations, stockholders' equity, and cash flows for
the six-month period ended December 31, 1999, present fairly, in all material
respects, the financial position of AMC Financial, Inc. and subsidiaries as of
December 31, 1999, and the results of their operations and their cash flows for
the six months then ended in conformity with generally accepted accounting
principles.

As discussed in Note 3 to the consolidated financial statements, the Company has
emerged from bankruptcy and applied fresh start accounting, effective June 30,
1999. As a result, the consolidated statement of financial condition as of
December 31, 1999, and the related consolidated statements of operations,
stockholders' equity, and cash flows for the six-month period ended December 31,
1999, are presented on a different basis than that for the periods before fresh
start, and therefore, are not comparable.


                                          /s/ KPMG LLP

Houston, Texas
March 10, 2000

                                       24
<PAGE>
                      AMC FINANCIAL, INC. AND SUBSIDIARIES
                      (FORMERLY CITYSCAPE FINANCIAL CORP.)
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION


                                               REORGANIZED      PREDECESSOR
                                                 COMPANY          COMPANY
                                              -------------    -------------
                                              DECEMBER 31,       DECEMBER 31,
                                                  1999               1998

ASSETS
  Cash and cash equivalents ..............    $  30,850,395    $  18,405,426
  Cash held in escrow ....................             --          3,768,695
  Marketable securities ..................          763,644             --
  Residual certificates ..................       12,538,461       33,660,930
  Mortgage loans held for sale, net ......       14,338,442      123,345,783
  Income taxes receivable ................        1,437,288        1,550,107
  Investment in discontinued operations,
    net ..................................       12,239,110       13,008,401
  Other assets ...........................          927,828       15,598,619
                                              -------------    -------------

Total assets .............................    $  73,095,168    $ 209,337,961
                                              =============    =============

LIABILITIES
  Warehouse financing facilities .........    $        --      $ 105,969,355
  Accounts payable and other liabilities .        9,651,469       23,519,199
  Liabilities subject to compromise ......             --        477,424,358
                                              -------------    -------------

Total liabilities ........................        9,651,469      606,912,912
                                              -------------    -------------

COMMITMENTS AND CONTINGENCES .............             --               --

STOCKHOLDERS' EQUITY (DEFICIT)
 Preferred stock, $.01 par value;
  10,000,000 shares authorized;
  0 shares at December 31, 1999;
  5,177 shares issued and
  outstanding at December 31, 1998;
  Liquidation Preference-Series A
  Preferred Stock, $7,460,511;
  Series B Preferred Stock,
  $65,239,541 at December 31, 1998 .......             --                 52

 Common Stock, $.01 par value;
  25,000,000 shares authorized;
  7,743,622 issued and outstanding
  at December 31, 1999; $.01 par
  value; 100,000 shares authorized;
  64,948,969 issued and outstanding
  at December 31, 1998 ...................           77,436          649,489
 Additional paid-in capital ..............       61,202,720      175,304,103
 Accumulated other comprehensive income ..          559,108             --
 Retained earnings (accumulated deficit) .        1,604,435     (573,353,595)
 Treasury stock, 0 shares at December 31,
   1999; 70,000 shares at December
   31, 1998, at cost .....................             --           (175,000)
                                              -------------    -------------
Total stockholders' equity (deficit) .....       63,443,699     (397,574,951)
                                              -------------    -------------
Total liabilities and stockholders' equity
  (deficit) ..............................    $  73,095,168    $ 209,337,961
                                              =============    =============

*Per share amounts are not meaningful due to reorganization. See Note 3.

          See accompanying notes to consolidated financial statements.

                                       25
<PAGE>
                      AMC FINANCIAL, INC. AND SUBSIDIARIES
                      (FORMERLY CITYSCAPE FINANCIAL CORP.)
                      CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                             REORGANIZED
                                               COMPANY                     PREDECESSOR COMPANY
                                            -------------     -------------------------------------------------
                                             SIX MONTHS         SIX MONTHS
                                               ENDED              ENDED
                                              DECEMBER           JUNE 30,          YEARS ENDED DECEMBER 31,
                                              31, 1999             1999             1998               1997
                                            -------------     -------------     -------------     -------------
<S>                                         <C>               <C>               <C>               <C>
REVENUES
  (Loss) gain on sale of loans .........    $     (75,366)    $   4,609,295     $     128,024     $  83,365,502
  Loss on valuation of residuals .......             --         (20,847,449)      (68,846,790)     (148,004,447)
  Mortgage origination income ..........             --                --           2,238,078         4,848,613
  Interest .............................        1,970,608         3,328,487        14,362,900        73,520,473
  Other ................................        2,646,641         7,659,773         1,454,148        20,301,883
                                            -------------     -------------     -------------     -------------
Total revenues .........................        4,541,883        (5,249,894)      (50,663,640)       34,032,024
                                            -------------     -------------     -------------     -------------

EXPENSES
  Salaries and employee benefits .......          287,355         2,856,989        28,744,183        41,088,956
  Interest expense .....................             --           1,401,630        46,438,779        70,689,198
  Selling expenses .....................             --             256,407         4,423,984         4,136,812
  Other operating expenses .............        1,016,878         6,253,145        47,060,545        42,085,275
  Provision for loan losses ............             --                --           8,267,267        12,614,269
  Restructuring charges ................             --             790,000         3,233,760              --
                                            -------------     -------------     -------------     -------------
Total expenses .........................        1,304,233        11,558,171       138,168,518       170,614,510
                                            -------------     -------------     -------------     -------------
  Earnings (loss) from continuing
    operations before reorganization
    items, income tax, and extraordinary
    item ...............................        3,237,650       (16,808,065)     (188,832,158)     (136,582,486)
Reorganization items ...................             --           1,644,058        31,879,518              --
                                            -------------     -------------     -------------     -------------
  Earnings (loss) from continuing
    operations before income taxes and
    extraordinary item .................        3,237,650       (18,452,123)     (220,711,676)     (136,582,486)
Income taxes provision (benefit) .......        1,133,178            67,673            38,267       (18,076,574)
                                            -------------     -------------     -------------     -------------
  Earnings (loss) from continuing
    operations before extraordinary item        2,104,472       (18,519,796)     (220,749,943)     (118,505,912)
Extraordinary item - gain from
  discharge of pre-petition liabilities              --         416,094,747              --                --
                                            -------------     -------------     -------------     -------------
  Earnings (loss) from continuing
    operations .........................        2,104,472       397,574,951      (220,749,943)     (118,505,912)

DISCONTINUED OPERATIONS:
  Loss from discontinued operations,
    net of income tax benefit
    of $269,251 in 1999 and $37,188,000
    in 1997, and net of extraordinary item
    of $425,000 in 1997 ................         (500,037)             --                --        (245,906,000)

  Loss on disposal of discontinued
    operations .........................             --                --                --         (49,939,996)
                                            -------------     -------------     -------------     -------------
NET EARNINGS (LOSS) ....................        1,604,435       397,574,951      (220,749,943)     (414,351,908)
Preferred stock dividends paid in
  common stock .........................             --                --                --             904,531
Preferred stock - increase in
  liquidation preference ...............             --                --           6,278,214           917,530
Preferred stock - default payments .....             --                --          14,048,722              --
Preferred stock - beneficial discount ..             --                --                --           2,725,000
                                            -------------     -------------     -------------     -------------
NET EARNINGS (LOSS) APPLICABLE TO
  COMMON STOCKHOLDERS ..................    $   1,604,435     $ 397,574,951     $(241,076,879)    $(418,898,969)
                                            =============     =============     =============     =============

EARNINGS PER COMMON SHARE:
  Basic and Diluted
   Earnings from continuing operations .    $        0.31                 *                 *                 *
   Loss from discontinued operations ...            (0.07)                *                 *                 *
                                            -------------
   Net earnings ........................    $        0.24                 *                 *                 *
                                            =============

WEIGHTED AVERAGE NUMBER OF COMMON
  SHARES OUTSTANDING:
  Basic and Diluted ....................        6,790,241                 *                 *                 *
                                            =============
</TABLE>

*Per share amounts are not meaningful due to reorganization. See Note 3.

          See accompanying notes to consolidated financial statements.

                                       26
<PAGE>
                      AMC FINANCIAL, INC. AND SUBSIDIARIES
                      (FORMERLY CITYSCAPE FINANCIAL CORP.)
            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
          FOR THE SIX MONTHS ENDED DECEMBER 31, 1999 AND JUNE 30, 1999
                 AND THE YEARS ENDED DECEMBER 31, 1998 AND 1997


<TABLE>
<CAPTION>
                                                            PREFERRED STOCK                   COMMON STOCK
                                                     --------------------------------  ---------------------------
                                                        NUMBER                                                         ADDITIONAL
                                                          OF                            NUMBER OF                        PAID-IN
                                                        SHARES           AMOUNT          SHARES         AMOUNT          CAPITAL
                                                     -------------     -------------  -------------  -------------    -------------
<S>                                                  <C>               <C>            <C>            <C>              <C>
Balance at December 31, 1996 ....................             --                --    $  29,649,133  $     296,491    $  57,782,609
   Comprehensive loss:
      Net loss ..................................             --                --             --             --               --
      Other comprehensive loss, net of taxes
          Unrealized loss on available-for-sale
            securities ..........................             --                --             --             --               --
          Foreign currency translation adjustment             --                --             --             --               --
      Other comprehensive loss ..................             --                --             --             --               --
   Comprehensive loss
   Issuance of common stock .....................             --                --          204,288          2,043          829,864
   Induced conversion of convertible subordinated
      debentures ................................             --                --          876,040          8,760       18,170,749
   Issuance of preferred stock ..................           10,000               100           --             --         97,958,497
   Conversion of preferred stock ................           (4,705)              (47)    16,851,414        168,514         (168,467)
   Preferred stock dividends paid in common stock             --                --           67,863            679          903,852
   Purchase of treasury stock ...................             --                --             --             --               --
                                                     -------------     -------------  -------------  -------------    -------------
Balance at December 31, 1997 ....................            5,295                53     47,648,738        476,487      175,477,104
      Net loss ..................................             --                --             --             --               --
   Conversion of preferred stock ................             (118)               (1)    17,300,231        173,002         (173,001)
                                                     -------------     -------------  -------------  -------------    -------------
Balance at December 31, 1998 ....................            5,177                52     64,948,969        649,489      175,304,103
      Net earnings ..............................             --                --             --             --               --
   Extinguishment of old debt ...................           (5,177)              (52)   (64,948,969)      (649,489)    (175,304,103)
   Issuance of new common stock .................             --                --        7,803,488         78,035       60,338,194
                                                     -------------     -------------  -------------  -------------    -------------
Balance at June 30, 1999 ........................             --                --        7,803,488         78,035       60,338,194

   Comprehensive income:
      Net earnings ..............................             --                --             --             --               --
      Other comprehensive income, net of taxes
          Unrealized gain on available-for-sale
            securities ..........................             --                --             --             --               --
          Unrealized gain on write-up of residual
            certificates ........................             --                --             --             --               --
      Other comprehensive income ................             --                --             --             --               --
   Comprehensive income .........................             --                --             --             --               --
   Reduction of deferred tax valuation allowance              --                --             --             --            863,927
   Issuance of new common stock .................             --                --           42,057            420             --
   Adjustments to new common stock ..............             --                --         (101,923)        (1,019)             599
                                                     -------------     -------------  -------------  -------------    -------------
Balance at December 31, 1999 ....................             --       $        --        7,743,622   $     77,436    $  61,202,720
                                                     =============     =============  =============  =============    =============
</TABLE>

                                       27
<PAGE>
                      AMC FINANCIAL, INC. AND SUBSIDIARIES
                      (FORMERLY CITYSCAPE FINANCIAL CORP.)
            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
          FOR THE SIX MONTHS ENDED DECEMBER 31, 1999 AND JUNE 30, 1999
                 AND THE YEARS ENDED DECEMBER 31, 1998 AND 1997

<TABLE>
<CAPTION>
                                                                 ACCUMULATED        RETAINED
                                                                    OTHER           EARNINGS
                                                                COMPREHENSIVE     (ACCUMULATED       TREASURY
                                                                INCOME (LOSS)       DEFICIT)           STOCK              TOTAL
                                                                -------------     -------------     -------------     -------------
<S>                                                             <C>               <C>               <C>                 <C>
Balance at December 31, 1996 ................................   $   8,328,950     $  72,424,143     $        --         138,832,193
   Comprehensive loss:
      Net loss ..............................................            --        (414,351,908)             --        (414,351,908)
      Other comprehensive loss, net of taxes
         Unrealized loss on available-for-sale securities ...      (8,328,950)             --                --          (8,328,950)
         Foreign currency translation adjustment ............      (9,771,356)       (9,771,356)             --          (9,771,356)
                                                                                                                      -------------
      Other comprehensive loss ..............................            --                --                --         (18,100,306)
                                                                                                                      -------------
   Comprehensive loss .......................................                                                          (432,452,214)
                                                                                                                      -------------
   Issuance of common stock .................................            --                --                --             831,907
   Induced conversion of convertible subordinated debentures             --                --                --          18,179,509
   Issuance of preferred stock ..............................            --                --                --          97,958,597
   Conversion of preferred stock ............................            --                --                --                --
   Preferred stock dividends paid in common stock ...........            --            (904,531)             --                --
   Purchase of treasury stock ...............................            --                --            (175,000)         (175,000)
                                                                -------------     -------------     -------------     -------------
Balance at December 31, 1997 ................................            --        (352,603,652)         (175,000)     (176,825,008)
      Net loss - comprehensive loss .........................            --        (220,749,943)             --        (220,749,943)
   Conversion of preferred stock ............................            --                --                --                --
                                                                -------------     -------------     -------------     -------------
Balance at December 31, 1998 ................................            --        (573,353,595)         (175,000)     (397,574,951)
      Net earnings - comprehensive income ...................            --         397,574,951              --         397,574,951
   Extinguishment of old debt ...............................            --         175,778,644           175,000              --
   Issuance of new common stock .............................            --                --                --          60,416,229
                                                                -------------     -------------     -------------     -------------
Balance at June 30, 1999 ....................................            --                --                --          60,416,229

-----------------------------------------------------------------------------------------------------------------------------------
   Comprehensive income:
      Net earnings ..........................................            --           1,604,435              --           1,604,435
      Other comprehensive income, net of taxes
         Unrealized gain on available-for-sale securities ...         496,369              --                --             496,369
         Unrealized gain on write-up of residual certificates          62,739              --                --              62,739
                                                                                                                      -------------
      Other comprehensive income ............................            --                --                --             559,108
                                                                                                                      -------------
   Comprehensive income .....................................            --                --                --           2,163,543
                                                                                                                      -------------
   Reduction of deferred tax valuation allowance ............            --                --                --             863,927
   Issuance of new common stock .............................            --                --                --                 420
   Adjustments to new common stock ..........................            --                --                --                (420)
                                                                -------------     -------------     -------------     -------------
Balance at December 31, 1999 ................................   $     559,108     $   1,604,435     $        --       $  63,443,699
                                                                =============     =============     =============     =============
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       28
<PAGE>
                      AMC FINANCIAL, INC. AND SUBSIDIARIES
                       FORMERLY CITYSCAPE FINANCIAL CORP.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                             REORGANIZED
                                                               COMPANY                       PREDECESSOR COMPANY
                                                           ---------------   ------------------------------------------------------
                                                             SIX MONTHS        SIX MONTHS            YEARS ENDED DECEMBER 31,
                                                                ENDED             ENDED         -----------------------------------
                                                            DEC. 31, 1999     JUNE 30, 1999          1998                1997
                                                           ---------------   ---------------    ---------------     ---------------
<S>                                                        <C>               <C>                <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Earnings (loss) from continuing operations ...........  $     2,104,472   $   397,574,951    $  (220,749,943)    $  (118,505,912)
      Adjustments to reconcile net earnings (loss)
        from continuing operations to net cash provided
        by (used in) continuing operations
   Depreciation and amortization ........................            1,000           367,453          6,019,520           2,846,394
   Income taxes payable .................................          863,927           210,093         16,737,913         (27,527,673)
   Gain from the discharge of pre-petition liabilities ..             --        (416,094,747)              --                  --
   Decrease in mortgage servicing receivables ...........             --                --            4,969,162          35,098,537
   Decrease (increase) in residual certificates .........             --          21,218,991         92,814,726         (23,275,720)
   Provision for loan losses ............................             --                --            8,267,267          12,614,269
   Net purchases of securities under agreement
      to resell .........................................             --                --                 --           154,176,608
   Repayment of securities sold but not yet
      purchased .........................................             --                --                 --          (152,862,526)
   Proceeds from sale of mortgages ......................             --         104,576,347        414,167,300       1,637,387,344
   Mortgage origination fund disbursed ..................             --                --         (460,300,178)     (1,655,191,573)
   Accrued interest payable on senior notes
      and convertible debentures ........................             --                --           39,771,220           4,483,700
   Accrued reorganization charges .......................             --                --            8,521,475               --
   Other, net ...........................................       (2,511,981)       10,582,414          2,881,472           6,085,062
                                                           ---------------   ---------------    ---------------     ---------------
Net cash (used in) provided by continuing operations ....          457,418       118,435,502        (86,900,066)       (124,671,490)
   Adjustment to discontinued assets and liabilities
      (Note 4) ..........................................         (500,037)             --                 --                  --
Net cash used in discontinued operating activities ......             --                --                 --          (177,259,754)
                                                           ---------------   ---------------    ---------------     ---------------
Net cash (used in) provided by operating activities .....          (42,619)      118,435,502        (86,900,066)       (301,931,244)
                                                           ---------------   ---------------    ---------------     ---------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Sale of discontinued operations, net .................             --                --           71,223,599                --
   Proceeds from equipment sale and lease-back
      financing .........................................             --                --                 --             1,776,283
   Sales (purchases) of equipment .......................             --              21,441               --            (5,134,122)
   Proceeds from sale of mortgages held for investment ..             --                --            2,997,382          15,248,227
   Proceeds from sale of available-for-sale securities ..             --                --                 --            18,288,999
                                                           ---------------   ---------------    ---------------     ---------------
Net cash provided by investing activities ...............             --              21,441         74,220,981          30,179,387
                                                           ---------------   ---------------    ---------------     ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   (Decrease) increase in warehouse facility ............             --        (105,969,355)        28,490,348           5,216,716
   Decrease increase in financing facility ..............             --                --                 --            (7,966,292)
   Proceeds from notes and loans payable ................             --                --                 --            49,000,000
   Repayment of notes and loans payable .................             --                --                 --          (161,405,843)
   Proceeds from issuance of preferred stock ............             --                --                 --            98,249,950
   Proceeds from issuance of convertible subordinated
       debentures .......................................             --                --                 --                  --
   Net proceeds from issuance of common stock ...........             --                --                 --               221,296
   Purchase of treasury stock ...........................             --                --                 --              (175,000)
   Net proceeds from issuance of senior notes ...........             --                --                 --           290,758,908
                                                           ---------------   ---------------    ---------------     ---------------
Net cash (used in) provided by financing activities .....             --        (105,969,355)        28,490,348         273,899,735
                                                           ---------------   ---------------    ---------------     ---------------
Net (decrease) increase in cash and cash equivalents ....          (42,619)       12,487,588         15,811,263           2,147,878
Cash and cash equivalents at beginning of the period ....       30,893,014        18,405,426          2,594,163             446,285
                                                           ---------------   ---------------    ---------------     ---------------
Cash and cash equivalents at end of the period ..........  $    30,850,395   $    30,893,014    $    18,405,426     $     2,594,163
                                                           ---------------   ---------------    ---------------     ---------------

Supplemental disclosure of cash flow information:
   Income taxes paid during the period:
      Continuing operations .............................  $          --     $          --      $         1,303     $     5,904,507
      Discontinued operations ...........................             --                --                 --               767,335
   Interest paid during the period:
      Continuing operations .............................             --     $     1,693,980    $     9,051,343     $    57,194,601
      Discontinued operations ...........................             --                --                 --               867,394
Supplemental schedule of non-cash investing and
   financing activities:
   Cancellation of indebtedness .........................  $          --     $   476,510,976    $          --       $          --
   Issuance of new common stock .........................             --          60,416,229               --                  --
   Unrealized gain on marketable securities, net of tax .          496,369              --                 --                  --
   Unrealized gain on residual certificates, net of tax .           62,739              --                 --                  --
   Reclassification of mortgages held for sale to
      mortgages held for investment .....................             --                --            3,533,355                --
   Conversion of convertible debentures into common
      stock .............................................             --                --                 --            14,110,000
   Preferred dividends paid in the form of common stock .             --                --                 --               904,531
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       29
<PAGE>
                      AMC FINANCIAL, INC. AND SUBSIDIARIES
                      (FORMERLY CITYSCAPE FINANCIAL CORP.)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION AND GOING CONCERN

The consolidated financial statements include the accounts of AMC Financial,
Inc. ("AMC"), formerly Cityscape Financial Corp. ("Cityscape") and its wholly
owned subsidiaries, collectively, the "Company". The Company's plan of
reorganization was confirmed July 1, 1999 (See Note 2. - Chapter 11
Proceedings). In accordance with the American Institute of Certified Public
Accountants' Statement of Position 90-7, "Financial Reporting by Entities in
Reorganization Under the Bankruptcy Code," ("SOP 90-7") the Company adopted
fresh start reporting as of June 30, 1999 (See Note 3. - Fresh Start Reporting).
Accordingly, a black line has been drawn in the accompanying consolidated
financial statements and footnotes to separate the operating results of the
pre-reorganization Company (the "Predecessor Company") (prior to June 30, 1999)
from the operating results of the post-reorganization Company (the "Reorganized
Company") (July 1, 1999 through December 31, 1999), since they are not prepared
on a comparable basis. All significant intercompany balances and transactions
have been eliminated in consolidation.

The accompanying consolidated financial statements for the six month period
ended June 30, 1999, and for each of the years in the two year period ended
December 31, 1998 were prepared assuming the Company would continue as a going
concern. The Company's filing for bankruptcy raises substantial doubt about its
ability to continue as a going concern. The consolidated financial statements
for each of the years in the two year period ended December 31, 1998, do not
include any adjustments that resulted from the outcome of these uncertainties.

REVENUE RECOGNITION

Gains and losses on sales of mortgage loans were recognized by the Predecessor
Company when mortgage loans were sold to investors. The Company primarily sold
loans on a non-recourse basis, at a price above the face value of the loan.
Gains and losses on sales of loans were recorded on the settlement date.
Included in gains on sale of loans for 1997 is the present value of the
differential between the interest rate payable by an obligator on a loan over
the interest rate passed through to the purchaser acquiring an interest in such
loan, less applicable recurring fees including the costs of credit enhancements
and trustee fees.

In 1997, included in the gain on sale of loans, is gain on securitizations
representing the fair value of the residual certificates received by the
Company. Gain on sales from securitization represents the difference between the
proceeds received from the trust plus the fair value of the residual
certificates less the carrying value of the loans sold. Fair value of these
certificates is determined based on various economic factors, including loan
types, sizes, interest rates, dates of origination, terms and geographic
locations. The Company also uses other available information such as reports on
collateral value, economic forecasts and historical default and prepayment rates
of the portfolio under review. Beginning in the fourth quarter of 1997, the
Company began selling its loans on a whole loan sale basis with servicing
released.

Interest income includes income from investments in high-grade commercial paper
and mortgage loans held for sale. The Predecessor Company calculated interest
income using the interest method which recognized

                                       30
<PAGE>
income on an accrual basis unless the loan was 90 days delinquent. The
Reorganized Company recognizes interest income when received.

VALUATION OF RESIDUALS

In certain securitizations, the Company purchases credit enhancements to the
senior interest in the related securitization trusts in the form of insurance
policies provided by insurance companies. The pooling and servicing agreements
that govern the distribution of cash flows from the loans included in the
securitization trusts require either (i) the establishment of a reserve that may
be funded with an initial cash deposit by the Company or (ii) the
over-collateralization of the securities trust intended to result in receipts
and collections on the loans that exceed the amounts required to be distributed
to holders of senior interests. To the extent that borrowers default on the
payment of principal or interest on the loans, losses will reduce the
over-collateralization to the extent that funds are available and will result in
a reduction of the value of the residual certificates held by the Company.

Although the Company believes it has made reasonable estimates of the fair value
of the residual certificates, the rate of prepayment and the amount of defaults
utilized by the Company are estimates and actual experience may vary, and has
varied from its estimates (See Note 5. - Residual Certificates). The fair value
of the residual certificates recorded by the Company upon the sale of loans
through securitizations will have been overstated if prepayments or losses are
greater than anticipated. Higher than anticipated rates of loan payments or
losses would require the Company to write down the fair value of the residual
certificates, adversely impacting earnings. Similarly, if delinquencies,
liquidations or interest rates were to be greater than was initially assumed,
the fair value of the residual certificates would be negatively impacted which
would have an adverse effect on income for the period in which such events
occur. The Company reviews these factors quarterly and, if necessary, adjusts
the remaining asset to the fair value of the residual certificates.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of cash on hand and money market funds with
original maturities of three months or less. Such funds are deemed to be cash
equivalents for purposes of the consolidated statements of cash flows.

MARKETABLE SECURITIES

Marketable securities which represent the Company's investment in the common
stock and warrants of Mortgage.com are classified as available-for-sale
securities. Available-for-sale securities are carried at fair value, with
unrealized gains and losses, reported as a separate component within
stockholders' equity (deficit), in accumulated other comprehensive income. Prior
to Mortgage.com becoming a publicly traded company, the stock was not readily
traded and therefore a value was not determined. Mortgage.com became publicly
traded on August 11, 1999, and the stock and warrants have been adjusted to fair
market value of $496,369, net of taxes of $267,275, at December 31, 1999.

                                       31
<PAGE>
MORTGAGES HELD FOR SALE, NET

Mortgage loans held for sale, net, are reported at the lower of cost or market
value, determined on an aggregate basis. Market value is determined by current
investor yield requirements and credit quality of the loans. Net valuation
adjustments are recognized through a valuation allowance by charges to income.

REAL ESTATE OWNED, NET

Real estate owned consists of real estate acquired through foreclosure or
deed-in-lieu on defaulted loan receivables and is included in other assets.
These properties are carried at the lower of fair value less estimated selling
costs or the acquisition cost of the properties.

EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET

With the move from the office in Elmsford, New York to Houston, Texas, the book
value of leasehold improvements was written off, remaining office equipment was
sold and as such there were no balances in equipment and leasehold improvements
as of December 31, 1999. Prior to the closing of the New York office, equipment
and leasehold improvements, net, were stated at original cost less accumulated
depreciation and amortization. Depreciation was computed principally by using
the straight-line method based on the estimated lives of the depreciable assets.

Expenditures for maintenance and repairs are charged to the appropriate
operating account at the time the expense is incurred.

LIABILITIES SUBJECT TO COMPROMISE

In accordance with SOP 90-7, the Company classified all pre-petition liabilities
that would be impaired by the Amended Plan as liabilities subject to compromise.

Liabilities subject to compromise as of December 31, 1998, pursuant to the
Amended Plan are summarized as follows:

12 3/4% Senior Notes ........................................    $300,000,000
6% Convertible Subordinated Debentures ......................     129,620,000
Accrued interest related to Senior Notes and
  Convertible Debentures.....................................      39,771,220
Accounts payable ............................................       8,033,138
                                                                 ------------
                                                                 $477,424,358
                                                                 ============

Such  liabilities  were  extinguished  with Fresh Start  Accounting (See
Note 3. - Fresh Start Reporting).

INCOME TAXES

The Company accounts for income taxes under the asset and liability method.
Under this method, deferred tax assets and liabilities are recognized for the
future tax consequences attributable to the difference between the financial
statement and tax reporting bases of existing assets and liabilities and
operating loss and tax credit carryforwards.

Deferred income taxes are provided for the temporary differences between the
financial reporting basis and the tax basis of the Company's assets and
liabilities. In accordance with SOP 90-7, income tax benefits

                                       32
<PAGE>
recognized from preconfirmation net operating loss carryforwards are used first
to reduce reorganization value in excess of amounts allowable to identifiable
assets and thereafter to increase additional paid-in capital. (See Note 17 -
Income Taxes)

EARNINGS PER SHARE

Earnings per share ("EPS") information for the Predecessor Company is not
presented because the revision of the Company's capital structure pursuant to
the Amended Plan makes such information not meaningful.

Earnings per share for the six months ended December 31, 1999 was determined
using the weighted average shares outstanding during the period. The Company has
no preferred stock or stock options, which are convertible into common stock and
therefore, diluted earnings per share is equal to basic earnings per share.

In computing EPS, the Company has used shares actually issued to creditors since
total shares allocated for issuance to each class of claims may not be issued.
The Company has used the effective date of the Amended Plan, July 1, 1999, to
weight such shares.

USE OF ESTIMATES

The preparation of consolidated financial statements in conformity with
generally accepted accounting principals requires management to make estimates
and assumptions that affect the amounts reported in the consolidated financial
statements and accompanying notes. Actual results could differ from those
estimates. Material estimates that are particularly susceptible to significant
change relate to the valuation of the residual certificates and mortgage loans
held for sale, net.

NEW ACCOUNTING PRONOUNCEMENTS

Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and for Hedging Activities," requires companies to
recognize all derivatives as either assets or liabilities in the statement of
financial condition and to record those instruments at fair value. SFAS No. 133
requires that changes in fair value of a derivative be recognized currently in
earnings unless specific hedge accounting criteria are met. Upon implementation
of SFAS No. 133, hedging relationships may be redesignated and securities held
to maturity may be transferred to available-for-sale or trading. SFAS No. 137,
"Accounting for Derivative Instruments and Hedging Activities - Deferral of the
Effective Date of FASB Statement No. 133," deferred the effective date of SFAS
No. 133 to fiscal years beginning after June 15, 2000. The Company will adopt
SFAS No. 133 on January 1, 2001 and is evaluating the impact, if any, this
statement may have on its future consolidated financial statements.

Effective January 1, 1999, the Company adopted SFAS No. 134, "Accounting for
Mortgage-Backed Securities Retained after the Securitization of Mortgage Loans
Held for Sale by a Mortgage Banking Enterprise," which requires that any
mortgage-backed securities retained after securitization of a mortgage loan held
for sale be classified based on the Company's intentions. Any retained
mortgage-backed securities that are committed to be sold before or during the
securitization process must be classified as trading.

                                       33
<PAGE>
2.    CHAPTER 11 PROCEEDINGS

Cityscape determined during 1998 that the best alternative for recapitalizing
itself over the long-term and maximizing the recovery of creditors and senior
equity holders of Cityscape was through a prepackaged plan of reorganization for
Cityscape and its wholly owned subsidiary Cityscape Corp. ("CSC"), pursuant to
the Bankruptcy Code. On October 6, 1998, Cityscape and CSC filed voluntary
petitions (the "Petitions") in the United States Bankruptcy Court for the
Southern District of New York (the "Bankruptcy Court").

During the second and third quarters of 1998, Cityscape engaged in negotiations,
first with holders of a majority of the Notes (as defined below), and, second
with holders of a majority of the Convertible Debentures (as defined below) on
the terms of the plan of reorganization that both groups would find acceptable.
Those negotiations resulted in acceptance by both groups by the requisite
majorities of the terms of the plan of reorganization (the "Original Plan").
Cityscape solicited acceptances of the Original Plan from the holders of its
Notes, Convertible Debentures and Preferred Stock (as defined below). The
Original Plan received the requisite approval from all classes other than the
holders of Cityscape's Series B Preferred Stock ("Preferred Stock"). Although
Cityscape and other parties with an economic stake in the reorganization
anticipated that the Original Plan would be confirmed at the originally
scheduled confirmation hearing, the Original Plan was not confirmed due
primarily to deteriorating market conditions and the Debtors' inability to
obtain necessary post-reorganization loan warehouse financing to allow them to
emerge from Chapter 11. As a result, Cityscape revised the Original Plan (the
"Amended Plan").

On November 17, 1998, Cityscape decided to suspend indefinitely all of its loan
origination and purchase activities. Cityscape notified its brokers that it had
ceased funding mortgage loans, other than loans that were in its origination
pipeline for which it had issued commitments. Cityscape's decision was based
upon its determination, following discussions with potential lenders regarding
post-reorganization loan warehouse financing, that adequate sources of such
financing were not available. With no adequate sources of such financing,
Cityscape determined that it was unable to continue to originate and purchase
mortgage loans. On or about December 18, 1998, Cityscape funded the last of its
mortgage loans for which it had issued commitments as of November 17, 1998.

On June 16, 1999, the Bankruptcy Court entered an order confirming
reorganization under the Amended Plan. The effective date of the Amended Plan
was July 1, 1999, and Cityscape was renamed AMC Financial, Inc. The Amended Plan
provided for substantive consolidation of the assets of Cityscape and CSC and
for distributions to creditors as summarized below (which estimated
distributions were based upon Cityscape's and CSC's estimate of $10.0 million in
general unsecured claims that would ultimately be allowed by the Bankruptcy
Court). The Amended Plan provided that: (i) administrative claims, priority tax
claims, bank claims, other secured claims, and priority claims would be paid in
cash in full, which claims paid by the Company as of December 31, 1999 totaled
$3,337,895; (ii) holders of the 12 3/4% Series A Senior Notes (the "Notes") due
2004 have been allocated in exchange for all of their claims, 7,346,708 shares
or approximately 92.5% of the new common shares, of which 7,325,192 shares have
been issued at December 31, 1999 (iii) holders of 6% Convertible Subordinated
Debentures (the "Convertible Debentures") due 2006 have been allocated in
exchange for all of their claims, 431,702 shares or approximately 5.4% of the
new common shares, of which 376,373 shares have been issued as of December 31,
1999, (iv) holders of general unsecured claims have been allocated 165,790
shares or approximately 2.1% of the new common shares, of which 42,057 shares
have been issued at December 31, 1999; and (v) common stock, Preferred Stock and
warrants of Cityscape would be extinguished and holders thereof would receive no
distribution under the Amended Plan.

                                       34
<PAGE>
For the consolidated statement of financial condition presentation and earnings
per share calculation the Company considers as outstanding shares only those
shares actually distributed to creditors. As claims are settled, additional
shares are transferred to the stock distribution agent for issuance. Since the
total shares allocated for each class of claims may not actually be issued, the
Company has elected to include in outstanding shares only those shares actually
issued. The Company expects the stock distribution agent to complete the
issuance of remaining shares by the end of 2000.

3.    FRESH START REPORTING

As of June 30, 1999, the Company adopted fresh start reporting in accordance
with SOP 90-7. Fresh start reporting assumes that a new reporting entity has
been created and assets and liabilities should be reported at their fair values
as of the effective date.

The reorganization value of $76.8 million at June 30, 1999, was determined based
upon the Company's estimate of the fair value of its assets as defined in the
plan of reorganization which does not assume any future origination and loan
sale activity. Accordingly, the reorganization value approximates the fair value
of its assets before considering liabilities, which must be assumed and
extinguished pursuant to the terms of the reorganization plan, as amended, and
represents the Company's estimates of the amount a buyer would pay for the
assets after the restructuring.

The Company's emergence from Chapter 11 proceedings and the adoption of fresh
start reporting resulted in the following adjustments to the Company's Statement
of Financial Condition as of June 30, 1999:

<TABLE>
<CAPTION>
                                                            PREDECESSOR                                               REORGANIZED
                                                             COMPANY             FRESH START ADJUSTMENTS                COMPANY
                                                             JUNE 30,        ---------------------------------          JUNE 30,
                                                               1999             DEBIT               CREDIT               1999
                                                           -------------     -------------       -------------       -------------
<S>                                                        <C>               <C>                 <C>                 <C>
ASSETS
  Cash and cash equivalents .............................. $  30,893,014     $        --         $        --         $  30,893,014
  Residual certificates ..................................    12,441,939              --                  --            12,441,939
  Mortgage loans held for sale, net ......................    16,490,307              --                  --            16,490,307
  Income tax receivable ..................................     1,437,288              --                  --             1,437,288
  Investment in discontinued operations, net .............    13,008,401              --                  --            13,008,401
  Other assets ...........................................     2,543,004              --                  --             2,543,004
                                                           -------------     -------------       -------------       -------------
   Total assets .......................................... $  76,813,953     $        --         $        --         $  76,813,953
                                                           =============     =============       =============       =============


LIABILITIES
  Accounts payable and other liabilities ................. $  16,397,724     $        --         $        --         $  16,397,724
  Liabilities subject to compromise ......................   476,510,976       476,510,976(1)             --                  --
                                                           -------------     -------------       -------------       -------------
   Total liabilities .....................................   492,908,700       476,510,976                --            16,397,724
                                                           -------------     -------------       -------------       -------------

STOCKHOLDERS' (DEFICIT) EQUITY
  Preferred stock ........................................            52                52(2)             --                  --
  Common stock ...........................................       649,489           649,489(2)           78,035(3)           78,035
  Additional paid-in capital .............................   175,304,103       175,304,103(2)       60,338,194(3)       60,338,194
  Accumulated deficit ....................................  (591,873,391)             --           175,778,644(2)             --
                                                                                                   416,094,747(4)
  Treasury stock .........................................      (175,000)             --               175,000(2)             --
                                                           -------------     -------------       -------------       -------------
   Total stockholders' (deficit) equity ..................  (416,094,747)      175,953,644         652,464,620          60,416,229
                                                           -------------     -------------       -------------       -------------
   Total liabilities and stockholders' (deficit) equity .. $  76,813,953     $ 652,464,620       $ 652,464,620       $  76,813,953
                                                           =============     =============       =============       =============
</TABLE>

                                       35
<PAGE>
<TABLE>
<CAPTION>
<S>                                                                                                           <C>
(1)         To record the discharge of debt, related interest and other liabilities as follows:

                        Discharge/extinguishment - Notes                                                      $          300,000,000
                        Discharge/extinguishment - Convertible Debentures                                                129,620,000
                        Accrued interest on Notes and Convertible Debentures                                              39,771,220
                        Other liabilities discharged                                                                       7,119,756
                                                                                                              ----------------------
                                                                                                              $          476,510,976
                                                                                                              ======================

(2)         To eliminate the Predecessor Company's stockholders' deficit.

(3)         To record the issuance of 7,803,488 shares of new common stock (par value $0.01 per share).

(4)         To record the extraordinary gain resulting from the discharge of indebtedness, calculated as follows:

            Historical carrying value of old debt securities                                     $              429,620,000
            Historical carrying value of related accrued interest                                                39,771,220
            Historical carrying value of other liabilities                                                        7,119,756
            New common stock (7.8 million shares to creditors)                                                  (60,416,229)
                                                                                                 --------------------------
                                                                                                 $              416,094,747
                                                                                                 ==========================
</TABLE>

4.    DISCONTINUED OPERATIONS

Cityscape commenced operations in the United Kingdom in May 1995 with the
formation of City Mortgage Limited ("CSC-UK"), an English corporation that
originated, sold and serviced loans in England, Scotland and Wales in which
Cityscape initially held a 50% interest and subsequently purchased the remaining
50% of CSC-UK. CSC-UK had no operations and no predecessor prior to May 1995.

As a result of liquidity constraints, Cityscape adopted a plan in March 1998 to
sell the assets of CSC-UK. In April 1998, Cityscape completed the sale to Ocwen
Financial Corporation and Ocwen Asset Investment Corp. of substantially all of
the assets and certain liabilities of CSC-UK. As a result, Cityscape received
proceeds, at the time of closing, of $83.8 million, net of closing costs and
other fees. During 1998, Cityscape received $4.5 million related to loan
portfolio adjustments. In 1999, the Company received $3.1 million in settlement
of the assumed liabilities at the close of sale.

Accordingly, the operating results of CSC-UK and its subsidiaries have been
segregated from continuing operations and reported as a separate line item in
the Company's consolidated financial statements. In addition, net assets of
CSC-UK have been reclassified in the Company's consolidated financial statements
as investment in discontinued operations, net.

                                       36
<PAGE>
CSC-UK had no operations in 1999 or 1998. Summarized financial information for
the year ended December 31, 1997 for the discontinued operations is as follows:

      SUMMARIZED STATEMENT OF OPERATIONS:
       Revenues
        Gain on sale of loans .........................    $  27,797,000
        Servicing receivables .........................     (106,153,000)
        Interest income ...............................       18,811,000
        Other income ..................................       21,444,000
                                                           -------------
                                                             (38,101,000)
       Expenses
        Interest expense ..............................       26,599,000
        Write-off and amortization of goodwill ........       58,185,000
        Write-off and amortization of prepaid
          commitment fees..............................       35,245,000
        Other operating expenses ......................      125,389,000
                                                           -------------

        Loss before income taxes and extraordinary item     (283,519,000)
        Gain on extinguishment of debt, net of taxes ..          425,000
                                                           -------------
        Loss before income tax ........................     (283,094,000)
        Income tax benefit ............................      (37,188,000)
                                                           -------------
       Loss from discontinued operations ..............    $(245,906,000)
                                                           =============

As of December 31, 1999, the Company's net investment in discontinued operations
totaled $12.2 million, net representing cash on hand in the discontinued
operations of approximately $11.9 million and net receivables (net of
liabilities) due of approximately $307,000. The Company recorded a loss on
discontinued operations of $500,037, net of income tax benefit of $269,251, in
1999 due to an increase in an allowance against an income tax receivable and an
increase in potential liabilities. The Company expects to maintain a balance of
cash on hand in the discontinued operations to cover existing and potential
liabilities and costs until dissolution of the existing legal entities of CSC-UK
and its subsidiaries.

5.    RESIDUAL CERTIFICATES

The interests that the Company received upon loan sales through its
securitizations are in the form of residual certificates. The Company's residual
certificates are comprised of interests in home equity mortgage loans and
"Sav*A-Loan(R)" mortgage loans (loans generally made to homeowners with little
or no equity in their property but who possess a favorable credit profile and
debt-to-income ratio and who often use the proceeds from such loans to repay
outstanding indebtedness as well as make home improvements).

Prior to the fourth quarter of 1997, the Company sold its loan origination and
purchase volume through various securitizations. In loan sales through
securitizations, the Company sells loans that it has originated or purchased to
a real estate trust for a cash purchase price and interests in such trust are
represented by residual certificates. The cash purchase price is raised through
an offering of pass-through certificates by the trust.

The Company classifies these residual certificates as "securities
available-for-sale" and, as such, they are recorded at their fair value. Fair
value of these certificates is determined based on various economic factors,
including loan types, sizes, interest rates, dates of origination, terms and
geographic locations. The Company also uses other available information such as
reports on prepayment rates, interest rates, collateral value, economic
forecasts and historical default and prepayment rates of the portfolio under
review to determine the fair value of the residual certificates. If the fair
value of the residual certificates is different from the recorded value and the
difference is considered to be a permanent difference, the gain or loss on

                                       37
<PAGE>
the valuation of residuals will be reflected in the consolidated statements of
operations. Should the unrealized gain or loss be considered to be a temporary
difference, the unrealized amount is recorded in accumulated other comprehensive
income in stockholders' equity.

The table below summaries the value of the Company's residual certificates by
product type:

                                       REORGANIZED      PREDECESSOR
                                         COMPANY          COMPANY
                                       DECEMBER 31,     DECEMBER 31,
                                           1999            1998
                                      --------------   -------------
         Home Equity                  $            -   $   6,490,461
         Sav*-A-Loan(R)                   12,538,461      27,170,469
                                      --------------   -------------
         Total                        $   12,538,461   $  33,660,930
                                      ==============   =============

The key assumptions used to value the Company's residual certificates at
December 31, 1999, June 30, 1999, December 31, 1998 and 1997 are as follows:

<TABLE>
<CAPTION>
                            REORGANIZED
                            COMPANY                           PREDECESSOR COMPANY
                            ------------------         -----------------------------------
                                                                          DECEMBER 31,
                                                                      --------------------
                            DECEMBER 31, 1999          JUNE 30, 1999    1998       1997
                            ------------------         -------------  --------   ---------
<S>                         <C>                        <C>            <C>        <C>
HOME EQUITY
  Discount Rate                           N/A                20.0%      20.0%       15.0%
  Constant Prepayment Rate                N/A                30.0%      30.0%       31.8%
  Loss Rate Per Annum                     N/A            7.3-33.0%       7.5%        1.7%
SAV*-A-LOAN(R)
  Discount Rate                         20.0%                20.0%      20.0%       15.0%
  Constant Prepayment Rate              19.0%                19.0%      16.8%       16.8%
  Loss Rate Per Annum                3.0-8.0%            3.0-10.0%       4.5%        3.1%
</TABLE>

At December 31, 1997, the Company determined the fair value of its home equity
securitizations based upon the net realizable value as implied by the first
quarter 1998 sale of three of its home equity residuals. The loss on valuation
of $148.0 million included a loss of $89.8 million related to its home equity
securitizations and an additional loss on valuation of $35.9 million related to
the Sav*-A-Loan(R) residuals which reflected the Company's change in the key
assumptions used to value such residuals.

During 1998, the Company recorded a loss on valuation of residuals of $42.9
million on its home equity residuals and $25.9 million on its Sav*-A-Loan(R)
residuals. This loss on valuation loss was primarily a result of the Company
increasing the discount rate to 20% at December 31, 1998 from 15% from December
31, 1997 on both types of securitizations and increasing the loss assumptions to
7.5% per annum at December 31, 1998 on its home equity securitizations from 1.7%
per annum at December 31, 1997, as well as increasing the loss assumptions on
its Sav*-A-Loan(R) residuals to 4.5% per annum at December 31, 1998 from 3.1% at
December 31, 1997. The increased discount rate reflects the erosion and turmoil
in the subprime mortgage market experienced during 1998 and corresponding lack
of liquidity in the marketplace. The Company's loss experience through increased
liquidation efforts indicated higher loss levels than previously anticipated
requiring the corresponding increase in loss assumptions. The Company reduced
the constant prepayment rate on its home equity securitizations to 30% per annum
at December 31, 1998 from

                                       38
<PAGE>
31.8% per annum at December 31, 1997, which reflected the slower rates
experienced over the last half of 1998.

During the second quarter of 1999, the Company experienced significant changes
in the performance of the underlying pools of mortgages in both the home equity
and Sav*-A-Loan(R) securitizations. As a result of higher than anticipated
losses on all securitizations and higher prepayment speeds on Sav*-A-Loan(R),
the Company recorded a loss on valuation of residuals of $20.8 million. In
December 1999, the Company recorded an unrealized gain of $62,739, net of tax of
$33,783, on residual certificates. The unrealized gain was the result of a lower
loss rate as loans near maturity. The unrealized gain is considered a temporary
gain and has been recorded in stockholders' equity (deficit). In valuing the
residual certificates at the end of 1999, the Company used the same discount
rate of 20% in 1999 as in 1998 for Sav*-A-Loan(R) securitizations, increased the
constant prepayment rate from 16.8% at the end of 1998 to 19.0% at the end of
1999 and increased the loss rate per annum from 4.5% at December 31, 1998 to a
range of 3.0% to 8.0% at December 31, 1999. The home equity securitizations were
assigned no value at the end of 1999.

6.    MORTGAGE LOANS HELD FOR SALE, NET

The following table summarizes the carrying values of the Company's mortgage
loans held for sale at December 31, 1999 and 1998:

                                              REORGANIZED      PREDECESSOR
                                              COMPANY          COMPANY
                                              1999             1998
                                              -------------    -------------
      Home Equity and Sav*-A-Loan(R)          $  14,338,442    $ 123,345,783
                                              =============    =============

Included in mortgages held for sale at December 31, 1998, are $4.8 million of
loans formerly classified as mortgages held for investment (representing $13.6
million in principal value net of $8.8 million valuation allowance). The Company
reclassified these loans due to its decision to sell all of its mortgage loans
as part of its reorganization. During 1998, the Company recorded a $7.1 million
valuation allowance against its mortgages held for sale that were not formerly
classified as mortgages held for investment. Mortgage loans held for sale
totaled $29.7 million in principal at December 31, 1999 with a valuation
allowance of $15.4 million.

Included in mortgages held for sale at December 31, 1998 is $4.8 million of
loans formerly classified as mortgages held for investment (representing $13.6
million in principal value net of $8.8 million of valuation allowance). The
Company reclassified these loans due to its decision to sell all of its mortgage
loans as part of its reorganization. During 1998, the Company recorded a $7.1
million valuation allowance against its mortgages held for sale that were not
formerly classified as mortgages held for investment.

                                       39
<PAGE>
7.    OTHER ASSETS

Other assets at December 31, 1999 and 1998 consist of the following:

                                              REORGANIZED     PREDECESSOR
                                              COMPANY         COMPANY
                                              1999            1998
                                              -------------   ------------
   Prepaid expenses                           $      24,371   $  1,234,741
   Accrued interest receivable                      198,921        802,104
   Accounts receivable                              677,390      3,425,931
   Premiums due on sales                                  -        994,335
   Servicing advances, net of allowance                   -      8,405,999
   Real estate owned, net                                 -         26,160
   Equipment and leasehold improvements,                  -         38,686
   Other                                             27,146        670,663
                                              -------------   ------------
   Total                                      $     927,828   $ 15,598,619
                                              =============   ============

Accounts receivable at December 31, 1999 is comprised of the following:

      Securitization receivables      $   846,936
      Servicing receivables               363,932
                                      -----------
                                        1,210,868
      Reserves                           (533,478)
                                      -----------
      Net receivables                 $   677,390
                                      ===========

Real estate owned at December 31, 1999 totaled $1.1 million which was fully
reserved.

8.    CREDIT FACILITIES

GREENWICH WAREHOUSE FACILITY

Prior to the filing of the Petitions, Greenwich Capital Financial Products,
Inc., an affiliate of Greenwich Capital Markets, Inc. (referred to herein,
including any affiliates as "Greenwich") provided a warehouse credit facility
under which CSC borrowed funds on a short-term basis to support the accumulation
of loans by CSC prior to sale (the "Greenwich Facility"). Subsequent to the
filing of the Petitions and pursuant to an order of the Bankruptcy Court, dated
October 27, 1998, the Company and CSC obtained a $100 million post-petition
warehouse facility from Greenwich (the "Greenwich DIP Facility") which repaid in
full amounts due under the Greenwich Facility. The Greenwich DIP Facility was
secured by substantially all of the assets of CSC and the capital stock of CSC
and was guaranteed by the Company. The Greenwich DIP Facility originally bore
interest at an interest rate of LIBOR plus 2.75%. The Greenwich DIP Facility was
scheduled to terminate on February 28, 1999; however, the parties agreed by
amendment to the Greenwich DIP Facility (the "Greenwich DIP Facility Amendment")
to extend the termination of such facility until April 30, 1999. The Greenwich
DIP Facility Amendment was approved by an order of the Bankruptcy Court, dated
March 24, 1999. Under the Greenwich DIP Facility Amendment, the interest rate
was changed to the prime rate plus 2.50%. As of December 31, 1998, $73.4 million
was outstanding under the Greenwich DIP Facility. By the end of the second
quarter of 1999, there were no balances outstanding under the Greenwich DIP
Facility Amendment and the facility had been terminated.

                                       40
<PAGE>
CIT WAREHOUSE FACILITY

Prior to the filing of the Petitions, the CIT Group/Equipment Financing, Inc.
("CIT") provided a warehouse credit facility under which CSC borrowed funds on a
short-term basis to support the accumulation of loans by CSC prior to the sale
(the "CIT Facility"). Subsequent to the filing of the Petitions and pursuant to
an order of the Bankruptcy Court dated October 27, 1998, the Company and CSC
obtained a $150 million post-petition warehouse facility (the "CIT/Nomura DIP
Facility") from CIT and Nomura Asset and Capital Corporation which repaid in
full amounts due under the CIT Facility. The CIT/Nomura DIP Facility was secured
by substantially all of the assets of CSC and the capital stock of CSC and was
guaranteed by the Company. As of December 31, 1998, $32.6 million was
outstanding under the CIT/Nomura DIP Facility. As of the end of the second
quarter of 1999, there were no balances outstanding under the CIT/Nomura DIP
Facility and the facility had been terminated.

9.    SENIOR NOTES

In May 1997, the Company issued $300 million aggregate principal amount of 12
3/4% Senior Notes due September 1, 2004 in a private placement. The original
Senior Notes were not redeemable prior to maturity except in limited
circumstances. The coupon at 12 3/4% per annum, was payable semi-annually on
each June 1 and December 1 which commenced December 1, 1997. In September 1997,
the Company completed the exchange of such Notes for a like principal amount of
12 3/4% Series A Senior Notes due 2004 (the "Notes") which had the same terms as
the original Senior Notes in all material respects, except for certain transfer
transactions and registration rights.

In connection with its restructuring efforts, the Company determined to defer
the June 1, 1998 interest payment on the Notes. The continued deferral of the
interest payment on the Notes constituted an "Event of Default" pursuant to the
Indenture under which securities were issued. As of October 6, 1998, due to the
filing of the Petitions, the Company ceased accruing interest on the Notes.

With fresh start  reporting,  the Company's  Notes were  eliminated (See
Note 3. - Fresh Start Reporting).

10.   CONVERTIBLE PREFERRED STOCK

SERIES A PREFERRED STOCK

In April 1997, the Company completed the private placement of 5,000 shares of
its 6% Convertible Preferred Stock, Series A (the "Series A Preferred Stock"),
with an initial liquidation preference (the "Liquidation Preference") of $10,000
per share, and related five-year warrants (the "Series A Warrants") to purchase
500,000 shares of common stock with an exercise price of $20.625 per share.

During 1997 and 1998 the Liquidation Preference was adjusted by an amount equal
to the dividend in lieu of a dividend payment. The Liquidation Preference was
increased in January 1998 with the delisting of the Company's Common Stock from
the Nasdaq National Market. With the filing of the Petitions on October 6, 1998,
the Company ceased paying and accruing dividend on Series A Preferred Stock. As
of October 6, 1998, there were 626 shares of Series A Preferred Stock
outstanding and the Liquidation Preference varied up to $14,198 per share. At
December 31, 1998, all Series A Warrants were outstanding.

                                       41
<PAGE>
With fresh start reporting the Predecessor Company's Series A Preferred Stock
and Series A Warrants were eliminated (See Note 3. - Fresh Start Reporting).

SERIES B PREFERRED STOCK

In September 1997, the Company completed the private placement of 5,000 shares
of 6% Convertible Preferred Stock, Series B (the "Series B Preferred Stock"),
with an initial Liquidation Preference of $10,000 per share, and related
five-year warrants (the "Series B Warrants") to purchase 500,000 shares of
Common Stock with an exercise price per share equal to the lesser of (i) $14.71
or (ii) 130% of the average closing sales prices over the 20 trading day period
ending on the trading day immediately prior to the first anniversary of the
original issuance of the Series B Warrants. Dividends on the Series B Preferred
Stock were cumulative at the rate of 6% of the Liquidation Preference per annum
payable quarterly. Dividends were payable, at the option of the Company, (i) in
cash, (ii) in shares of Common Stock valued at the closing price on the day
immediately preceding the dividend payment date or (iii) by increasing the
Liquidation Preference in an amount equal to and in lieu of the cash dividend
payment.

During 1997 and 1998, the Liquidation Preference of the Series B Preferred Stock
was adjusted by an amount equal to the dividend in lieu of a dividend payment.
The Liquidation Preference of the Series B Preferred Stock was increased in
January 1998 with the delisting of the Company's Common Stock from the Nasdaq
National Market. With the filing of the Petitions on October 6, 1998, the
Company ceased paying and accruing dividends on Series B Preferred Stock. As of
October 6, 1998 there were 4,551 shares of Series B Preferred Stock outstanding
and the Liquidation Preference on Series B Preferred Stock was $14,335 per
share. At December 31, 1998, all Series B warrants were outstanding.

With fresh start reporting the Predecessor Company's Series B Preferred Stock
and Series B Warrants were eliminated (See Note 3. - Fresh Start Reporting).

11.   STOCKHOLDERS' EQUITY (DEFICIT)

With fresh start reporting the Predecessor Company's stockholders' deficit was
eliminated (See Note 3. - Fresh Start Reporting). The Reorganized Company has
25,000,000 shares of new common stock with a par value of $.01 per share. At of
December 31, 1999, 7,743,622 shares of new common stock had been issued in
accordance with the Amended Plan. Additional shares will be issued as claims are
settled.

12.   EMPLOYEE BENEFIT PLAN

The Predecessor Company had a deferred contribution plan (401(k)) for all
eligible employees. Contributions to the plan were in the form of employer
salary deferral which were subject to an employer matching contribution up to a
specified limit at the discretion of the Company. The Company made contributions
to the plan of $155,011 for the year ended December 31, 1997. No contributions
were made for the year ended December 31, 1998 or in 1999.

All employee stock plans became inoperative with the confirmation of the Amended
Plan.

There are no employee benefit plans for the Reorganized Company.

                                       42
<PAGE>
13.   OTHER INCOME

Other income includes the following for the six months ended December 31, 1999
and June 30, 1999, and the years ended December 31, 1998 and 1997:

<TABLE>
<CAPTION>
                                                         REORGANIZED
                                                           COMPANY                       PREDECESSOR COMPANY
                                                      -----------------  --------------------------------------------------------
                                                        SIX MONTHS          SIX MONTHS             YEARS ENDED DECEMBER 31
                                                           ENDED               ENDED         ------------------------------------
                                                      DECEMBER 31, 1999    JUNE 30, 1999           1998               1997
                                                      -----------------  -----------------   -----------------  -----------------
<S>                                                   <C>                <C>                 <C>                <C>
Servicing income .................................... $       1,004,250  $       2,532,060   $         819,910  $       1,640,288
Gain on sale of available-for-sale securities .......              --                 --                  --           17,957,258
Transfer servicing rights ...........................              --            6,100,000                --                 --
Legal settlements ...................................         1,536,490               --                  --                 --
Other income ........................................           105,901           (972,287)            634,238            704,337
                                                      -----------------  -----------------   -----------------  -----------------
Total ............................................... $       2,646,641  $       7,659,773   $       1,454,148  $      20,301,883
                                                      =================  =================   =================  =================
</TABLE>

During the second quarter of 1999, the Company entered into agreements to
transfer its servicing rights on all of its home equity securitizations to Ocwen
FSB and received net cash of $14.4 million (on the transfer of its 95-2, 95-3,
96-1, 96-2, 96-3 and 96-4 home equity securitizations) resulting in a net gain
of $6.1 million, representing amounts received in excess of the Company's
carrying value of servicer advances. These servicer advances represent claims
against the securitizations trust for reimbursement of advances made to such
trust by the Company as servicer. Other income for the six months ended June 30,
1999 includes the write-down of the amount due from Ocwen on home equity
securitization 95-1. The Company transferred servicing on 95-1 in July 1999 at
an amount equal to the Company's carrying value.

Gain on sale of available-for-sale securities represents the pre-tax gain on the
sale of 1,090,910 shares (after giving effect to a February 1997 100% stock
dividend) of IMC Mortgage Company, including its predecessor Industry Mortgage
Company, L.P., during 1997.

14.   OTHER OPERATING EXPENSES

Other operating expenses include the following for the six months ended December
31, 1999 and June 30, 1999, and for the years ended December 31, 1998 and 1997:

<TABLE>
<CAPTION>
                                                          REORGANIZED
                                                            COMPANY                            PREDECESSOR COMPANY
                                                          -----------          -----------------------------------------------------
                                                          SIX MONTHS           SIX MONTHS
                                                             ENDED               ENDED                   YEARS ENDED DECEMBER 31,
                                                          DECEMBER 31,          JUNE 30,            --------------------------------
                                                             1999                 1999                 1998                 1997
                                                          -----------          -----------          -----------          -----------
<S>                                                       <C>                  <C>                  <C>                  <C>
Professional fees ..............................          $   742,911          $ 1,777,761          $13,259,811          $12,272,453
Travel and entertainment .......................               14,454               59,742            1,464,732            2,656,336
Telephone ......................................               14,945              158,777            1,316,613            2,055,482
Foreclosure costs ..............................                 --              1,148,057            6,511,805            3,266,222
Occupancy ......................................                 --                408,791            2,707,517            2,476,794
Office and computer supplies ...................               11,842               27,914            1,390,062            2,560,059
Temporary help .................................                 --                532,081            1,478,732            1,267,265
Equipment leasing ..............................                2,799              158,486            1,993,722            1,386,113
Depreciation ...................................                1,000                6,000            3,495,258            1,361,670
Settlement expense .............................                 --                   --              2,040,000                 --
Other ..........................................              228,927            1,975,536           11,402,293           12,782,881
                                                          -----------          -----------          -----------          -----------
Total ..........................................          $ 1,016,878          $ 6,253,145          $47,060,545          $42,085,275
                                                          ===========          ===========          ===========          ===========
</TABLE>

                                       43
<PAGE>
Expenses for the six months ended December 31, 1999 were minimal due to accruals
established prior to fresh start reporting for fees associated with the
reorganization and closing of the New York office.

15.   RESTRUCTURING CHARGES

In February 1998, the Company announced that it had begun implementing a
restructuring plan that included streamlining and downsizing its operations. The
Company closed its branch operations in Virginia and significantly reduced its
correspondent originations of the foreseeable future and exited its conventional
lending business. Accordingly, in the first quarter of 1998, the Company
recorded a restructuring charge of $3.2 million. Of this amount, $1.1 million
represented severance payments to 142 former employees and $2.1 million
represented costs incurred in connection with lease obligations and write-off of
assets no longer in service.

In June 1999, the Company eliminated its servicing function and announced plans
to move the corporate office from Elmsford, New York to Houston, Texas. In
conjunction with these plans, the Company recorded a $790,000 restructuring
charge for severance and future lease obligations.

16.   REORGANIZATION ITEMS

Reorganization items for the six months ended June 30, 1999 and for the year
ended December 31, 1998 are detailed below:

                                         PREDECESSOR COMPANY
                                      --------------------------
                                         SIX
                                        MONTHS
                                         ENDED       YEAR ENDED
                                       JUNE 30,      DECEMBER 31,
                                         1999           1998
                                      ----------    ------------
   Professional fees                  $  814,824 $     7,716,294
   Severance                                  -        3,896,393
   Lease rejections/leasehold
   improvements                               -        5,338,000
   Deferred debt issuance costs               -       12,012,011
   Write-off servicing deposits          145,484              -
   Other reorganization items            683,750       2,916,820
                                      ----------    ------------
   Total                              $1,644,058    $ 31,879,518
                                      ==========    ============

On October 22, 1998, the Company reduced its workforce by 243 employees, from
454 employees to 211 employees. In connection with this reduction, the Company
closed its branch operations in California and Illinois, while maintaining its
offices in New York and Georgia. On November 17, 1998, the Company decided to
suspend indefinitely all of its loan origination and purchase activities. The
Company notified its brokers that it had ceased funding mortgage loans, other
than loans that were in its origination pipeline for which it had issued
commitments. The Company's decision was due to its determination, following
discussions with potential lenders regarding post-reorganization loan warehouse
financing, that adequate sources of such financing were not available. With no
adequate sources of such financing, the Company determined that it was unable to
continue loan origination and purchase activities and closed branch operations
in New York and Georgia and reduced its workforce by 92 additional employees,
including

                                       44
<PAGE>
corporate and servicing employees. Accordingly, the Company recorded a
reorganization charge of $31.9 million during the fourth quarter of 1998.

The Company incurred additional reorganization charges for the six months ended
June 30, 1999 including professional fees and expensing security deposits that
would be used to settle claims with lessors. There were no reorganization
charges for the six months ended December 31, 1999.

17.   INCOME TAXES

The provision (benefit) for income taxes from continuing operations for the six
months ended December 31, 1999 and June 30, 1999, and for the years ended
December 31, 1998 and 1997 are comprised of the following:

<TABLE>
<CAPTION>
                                                         REORGANIZED
                                                           COMPANY                        PREDECESSOR COMPANY
                                                      -----------------  --------------------------------------------------------
                                                         SIX MONTHS         SIX MONTHS             YEARS ENDED DECEMBER 31
                                                            ENDED             ENDED         -------------------------------------
                                                      DECEMBER 31, 1999    JUNE 30, 1999          1998                 1997
                                                      -----------------  -----------------  -----------------   -----------------
<S>                                                   <C>                <C>                <C>                 <C>
Current
      Federal ....................................... $            --    $            --    $            --     $     (14,558,408)
      State .........................................              --               67,673             38,267             300,000
                                                      -----------------  -----------------  -----------------   -----------------
                                                                   --               67,673             38,267         (14,258,408)
                                                      -----------------  -----------------  -----------------   -----------------

Deferred
      Federal .......................................         1,133,178               --                 --            (3,818,166)
      State .........................................              --                 --                 --                  --
                                                      -----------------  -----------------  -----------------   -----------------
                                                              1,133,178               --                 --            (3,818,166)
                                                      -----------------  -----------------  -----------------   -----------------

Provision (benefit) for income taxes from
  continuing operations ............................. $       1,133,178  $          67,673  $          38,267   $     (18,076,574)
                                                      =================  =================  =================   =================
</TABLE>

The Company recognized an income tax benefit of $269,251 related to the loss on
discontinued operations for the Reorganized Company for the six months ended
December 31, 1999.

The reconciliation of income tax computed at the U.S. federal statutory tax rate
to the effective income tax rate for the six months ended December 31, 1999 and
June 30, 1999, and for the years ended December 31, 1998 and 1997 is as follows:

<TABLE>
<CAPTION>
                                                      REORGANIZED
                                                        COMPANY                        PREDECESSOR COMPANY
                                                   -----------------  -----------------------------------------------------------
                                                      SIX MONTHS         SIX MONTHS               YEARS ENDED DECEMBER 31
                                                         ENDED             ENDED           --------------------------------------
                                                   DECEMBER 31, 1999    JUNE 30, 1999             1998                1997
                                                   -----------------  -----------------    -----------------    -----------------
<S>                                                <C>                <C>                  <C>                  <C>
Federal income tax at statutory rate ............               35.0%             (35.0%)              (35.0%)              (35.0%)
State and local taxes ...........................               --                 --                   --                    2.5%
Unrecognized deferred tax asset .................               --                 35.0%                35.0%                19.3%
Other, net ......................................               --                 --                   --                   --
                                                   -----------------  -----------------    -----------------    -----------------
                                                                35.0%                -%                   -%                (13.2%)
                                                   =================  =================    =================    =================
</TABLE>

Pursuant to SFAS No. 109, "Accounting for Income Taxes," the Company had
available certain deductible temporary differences and net operating loss
carryforwards for use in future tax reporting periods, which created deferred
tax assets. SFAS No. 109, requires that deferred tax assets be reduced by a
valuation allowance if, based on the weight of the available evidence, it is
more likely than not that some portion or all

                                       45
<PAGE>
of the deferred tax assets will not be realized. During the six months ended
December 31, 1999, the deferred tax asset valuation allowance was reduced by
$863,927 with a corresponding increase in additional paid-in capital in
accordance with SOP 90-7 to adjust the recorded net deferred tax asset to an
amount considered more likely than not to be realized. The deferred tax asset
net of the valuation allowance and recorded on the books of the Company was
$12.5 million at December 31, 1999. Realization of this asset is dependent on
generating sufficient taxable income prior to the expiration of the loss
carryforwards. Realization could also be affected by a significant ownership
change of the Company over a period of three years as prescribed by income tax
law. Although realization of the net deferred tax asset is not assured because
of these uncertainties, management believes it is more likely than not that all
of the recorded net deferred tax asset will be realized.

In accordance with SOP 90-7, income tax benefits recognized from preconfirmation
net operating loss carryforwards are used first to reduce the reorganization
value in excess of amounts allocable to identifiable assets and thereafter to
increase additional paid-in capital.

Deferred taxes as of December 31, and June 30, 1999 and December 31, 1998 and
1997 are as follows:

<TABLE>
<CAPTION>

                             REORGANIZED               PREDECESSOR COMPANY
                               COMPANY      ---------------------------------------------
                            -------------                           DECEMBER 31,
                             DECEMBER 31,     JUNE 30,      -----------------------------
                                1999            1999            1998            1997
                            -------------   -------------   -------------   -------------
<S>                         <C>             <C>             <C>             <C>
Gross deferred tax assets   $ 117,290,109   $ 118,154,036   $ 161,146,951   $  69,914,468
Less:  valuation allowance   (104,790,186)   (105,654,113)   (101,058,388)    (26,376,554)
                            -------------   -------------   -------------   -------------
Net deferred assets ......     12,499,923      12,499,923      60,088,563      43,537,914
                            -------------   -------------   -------------   -------------
Deferred tax liabilities .    (12,499,923)    (12,499,923)    (60,088,563)    (43,537,914)
                            -------------   -------------   -------------   -------------
Net deferred tax .........  $          -    $          -    $          -    $          -
                            =============   =============   =============   =============
</TABLE>

The major components of the gross deferred tax assets are the net operating loss
carryforwards and the unrealized loss on the valuation of residual certificates.
The gross deferred tax liabilities consist primarily of the book versus tax
differences relating to mortgage servicing rights.

At December 31, 1999, the Company has net operating loss carryforwards for
federal income tax purposes of approximately $140.2 million which are available
to offset future federal taxable income, if any, through 2014.

In accordance with the provisions of Internal Revenue Code Section 382,
utilization of the Company's net operating loss carry forwards could be limited
in years following a change in the Company's ownership. In general, a change in
ownership occurs if a shareholder's (or the combined group of shareholders each
owning less than 5%) ownership increases 50 percentage points over a three-year
period. The net operating loss limitation is computed by applying a percentage
(approximately 5%, as determined by the Internal Revenue Code) to the value of
the Company on the date of the change. The Section 382 limitation limits the use
of the net operating loss carryforward as computed on the date of change of
ownership. Net operating losses incurred after the date of the change of
ownership are not limited unless another change in ownership occurs. A change in
ownership occurred in October of 1997 primarily as a result of conversions of
the Company's Series A Preferred Stock into the Company's common stock.
Additionally, a change in ownership occurred upon the Company's emergence from
bankruptcy. Accordingly, the Company's use of pre-ownership change net operating
losses and certain other tax attributes (if any), to the extent remaining

                                       46
<PAGE>
after the reduction thereof as a result of the cancellation of indebtedness of
the Company, will be limited and generally will not exceed each year the product
of the long-term tax-exempt rate and the value of the Company's stock increased
to reflect the cancellation of indebtedness pursuant to the Amended Plan. The
Company had no net operating losses at December 31, 1999.

18.   COMMITMENTS AND CONTINGENCIES

LEASES

After the filing of the Petitions in the Bankruptcy Court, the Company undertook
a comprehensive review and evaluation of various unexpired, nonresidential real
property leases and executory contracts. Based on this review, the Company
rejected four leases of non-residential real property and six leases relating to
equipment, maintenance and information systems software. A charge of $5.3
million relating to the rejection of these leases and other leases the Company
intended to reject is included in reorganization items in the consolidated
statement of operations for the year ended December 31, 1998.

Rent expense for office space totaled $347,000 for the six months ended June 30,
1999 and $2.5 million and $2.3 million for the years ended December 31, 1998 and
1997, respectively. The Company incurred no rent expenses for the six months
ended December 31, 1999.

ADMINISTRATIVE SERVICES AGREEMENT

The Company entered into an Administrative Services Agreement (the "Agreement")
with AEGIS Mortgage Corporation ("AEGIS") to assume responsibility for
accounting and administrative activities effective September 1, 1999. The
Company pays administrative fees of $90,000 per month under the terms of the
Agreement. The Agreement is effective until terminated by either party. AEGIS
shall be required to give the Company a minimum of ninety (90) days prior
written notice of termination and the Company shall be required to give AEGIS a
minimum of thirty (30) days written notice prior to termination.

LITIGATION

      CEASAR ACTION. On or about September 29, 1997, a putative class action
lawsuit (the "Ceasar Action") was filed against the Company and two of its
former officers and directors in the United States District Court for the
Eastern District of New York (the "Eastern District") on behalf of all
purchasers of the Company's common stock during the period from April 1, 1997
through August 15, 1997. Between approximately October 14, 1997 and December 3,
1997, nine additional class action complaints were filed against the same
defendants, as well as certain additional former Company officers and directors.
Four of these additional complaints were filed in the Eastern District and five
were filed in the United States District Court for the Southern District of New
York (the "Southern District"). On or about October 28, 1997, the plaintiff in
the Ceasar Action filed an amended complaint naming three additional former
officers and directors as defendants. The amended complaint in the Ceasar Action
also extended the proposed class period from November 4, 1996 through October
22, 1997. The longest proposed class period of any of the complaints is from
April 1, 1996 through October 22, 1997. On or about February 2, 1998, an
additional lawsuit brought on behalf of two individual investors, rather than on
behalf of a putative class of investors, was filed against the Company and
certain of its former officers and directors in federal court in New Jersey (the
"New Jersey Action").

                                       47
<PAGE>
      In these actions, plaintiffs allege that the Company and its former senior
officers engaged in securities fraud by affirmatively misrepresenting and
failing to disclose material information regarding the lending practices of the
Company's UK subsidiary, and the impact that these lending practices would have
on the Company's financial results. Plaintiffs allege that certain public
filings and press releases issued by the Company were false or misleading. In
each of the putative class action complaints, plaintiffs have asserted
violations of Section 10(b) and Section 20(a) of the Securities Exchange Act of
1934, as amended. Plaintiffs seek unspecified damages, including pre-judgment
interest, attorneys' and accountants' fees and court costs.

      In December 1997, the Eastern District plaintiffs filed a motion for
appointment of lead plaintiffs and approval of co-lead counsel. On September 23,
1998, the court granted this motion. On March 25, 1998, the Company and its
former officers and directors who were defendants filed a motion with the
federal Judicial Panel for Multidistrict Litigation ("JPML"), seeking
consolidation of all current and future securities actions, including the New
Jersey Action, for pre-trial purposes before Judge Sterling Johnson in the
Eastern District. On June 12, 1998, the JPML granted this motion. As a result of
the Company's Chapter 11 proceedings, the action against the Company was
discharged when the Company's plan of reorganization became effective on July 1,
1999. The action is still pending against the individual defendants.

      WALSH ACTION. In January 1998, the Company commenced a breach of contract
action in the Southern District against Walsh Securities, Inc. ("Walsh"). The
action alleges that Walsh breached certain obligations that it owed to the
Company under an agreement whereby Walsh sold mortgage loans to the Company. The
Company claims damages totaling in excess of $11.9 million. In March 1998, Walsh
filed a motion to dismiss, or, alternatively, for summary judgment. In May 1998,
the Company served papers that opposed Walsh's motion and moved for summary
judgment as to certain of the loans. In December 1998, Judge Stein of the
Southern District denied Walsh's motion to dismiss, or, alternatively, for
summary judgment with respect to all but 69 of the loans at issue in the
litigation. With respect to those 69 loans, Judge Stein granted Walsh's motion
and dismissed the loans from the litigation. At that time, Judge Stein also
denied the Company's motion for summary judgment. On February 1, 1999, Judge
Stein denied the Company's motion for reconsideration of that part of his
December 1998 order which granted Walsh's motion to dismiss with respect to 69
of the loans at issue. The parties completed all discovery by the early summer
of 1999, and then filed cross-motions for summary judgment. The Company moved
for Partial Summary Judgment on 32 loans that were part of a fraudulent pyramid
scheme in New Jersey and that Walsh warranted under the parties' agreement as
being "true and correct in all material respects." Walsh, in turn, moved for
summary judgment on all of the loans remaining in the case, claiming that the
Company had waived its right to sue on all loans. The parties completed the
briefing on both motions on October 22, 1999, and do not expect the Court to
rule until some time in 2000.

      GLOBAL MORTGAGE ACTION. In August 1998, the Company filed a lawsuit in the
Circuit Court for Baltimore City, Maryland entitled Cityscape Corp et. al. v.
Global Mortgage et. al. (the "Global Mortgage Action") against various
defendants seeking damages for losses resulting from the Company's acquisition
in 1995 and 1996 of 145 fraudulent residential mortgages on inner city Baltimore
rowhouses. The Company recently consummated settlements with all but two of the
defendants in this case, and it has now confirmed agreements in principle to
settle with those two remaining defendants. Trial has been postponed
indefinitely, pending execution of appropriate settlement agreements between the
Company and the last two

                                       48
<PAGE>
defendants. Once the last two settlement agreements are executed, the trial will
be cancelled and this matter will be concluded.

      ELLIOTT ASSOCIATES ACTION. In September 1998, Elliott Associates, L.P. and
Westgate International, L.P. filed a lawsuit against the Company and certain of
its former officers and directors in the Southern District (the "Elliott
Associates Action"). In the complaint, plaintiffs described the lawsuit as "an
action for securities fraud and breach of contract arising out of the private
placement, in September 1997, of the Series B Preferred Stock of Cityscape."
Plaintiffs alleged violations of Section 10(b) of the Exchange Act (Count I);
Section 20(a) of the Exchange Act (Count II); and two breach of contract claims
against the Company (Counts III & IV). Plaintiffs alleged to have purchased a
total of approximately $20 million of such preferred stock. Plaintiffs sought
unspecified damages, including pre-judgment interest, attorneys' fees and other
expenses and court costs. The Company and its former officers and directors who
were defendants moved to dismiss the action. The action against the Company was
discharged when the Company's plan of reorganization became effective on July 1,
1999. The action against the remaining defendants has been settled and
dismissed.

      SIMPSON ACTION. In February 1998, a putative class action lawsuit was
filed against the Company in the U.S. District Court for the Northern District
of Mississippi (Greenville Division) (the "Simpson Action"). The Simpson Action
is a class action brought under the anti-kickback provisions of Section 8 of the
Real Estate Settlement Procedures Act ("RESPA"). The complaint alleges that, on
November 19, 1997, plaintiff Laverne Simpson, through the services of Few
Mortgage Group ("Few"), a mortgage broker, obtained refinancing for the mortgage
on her residence in Greenville, Mississippi. Few secured refinancing for
plaintiff through the Company. In connection with the financing, the Company is
alleged to have paid a premium to Few in the amount of $1,280.00. Plaintiff
claims that the payment was a referral fee and duplicate payment prohibited
under Section 8 of RESPA. Plaintiff is seeking compensatory damage for the
amounts "by which the interest rates and points charged were inflated."
Plaintiff also claims to represent a class consisting of all other persons
similarly situated, that is persons (i) who secured mortgage financing from the
Company through mortgage brokers from an unspecified period to date (claims
under Section 8 of RESPA are governed by a one year statute of limitations) and
(ii) whose mortgage brokers received a fee from the Company. Plaintiff is
seeking to recover compensatory damages on behalf of the putative class, which
is alleged to be "numerous," for the amounts that "the interest rates and points
charges were inflated" in connection with each class member's mortgage loan
transaction. The Company answered the complaint and plaintiff has not yet moved
for class certification. To date, there has not been a ruling on the merits of
either plaintiff's individual claim or the claims of the putative class. As a
result of the Company's Chapter 11 proceedings and the plaintiff's failure to
file a claim before the established bar date, plaintiff's claims against the
Company were discharged.

      PEAKS ACTION. In April 1998, the Company was named as a defendant in an
amended complaint filed against 59 separate defendants in the Circuit Court for
Baltimore City, Maryland entitled Peaks v. A Home of Your Own, Inc., et. al.
(the "Peaks Action"). This action, which was originally styled as a class
action, was later amended to drop the class allegations and instead joined 80
separate individual plaintiffs. The complaint alleges various causes of action
(including Conspiracy to Defraud, Fraud, Violation of Maryland Consumer
Protection Act and Unfair Trade Practices, Negligent Misrepresentation and
Negligence) relating to 89 allegedly fraudulent residential mortgages on
properties in inner city Baltimore. The Company is alleged to have purchased
(and still own) at least eight of the loans and may have previously purchased
and subsequently sold an additional seven of the loans. Due to the Company's
prior bankruptcy and an

                                       49
<PAGE>
agreement with plaintiff's counsel, the Company has never formally responded to
the Amended Complaint and has not participated formally in any discovery. The
Company has, however, monitored the proceedings in this case and has
participated in settlement discussions. The Company recently reached an
agreement to settle this matter in exchange for mutual releases and the payment
to the Company of a percentage of a settlement pool established for this
purpose. In addition to the proceeds of the settlement pool, the Company
anticipates certain additional recoveries from the proceeds of the refinancing
or sale of the collateral securing the loans. As a result of the Company's
Chapter 11 proceedings and the plaintiff's failure to file a claim before the
established bar date, plaintiff's claims against the Company were discharged.

      Although no assurance can be given as to the outcome of the unresolved
lawsuits described above, the Company believes that the allegations in each of
the actions are without merit and that its disclosures were proper, complete and
accurate. The Company intends to defend vigorously against these actions and
seek their early dismissal. The lawsuits, however, against the Company, could
have a material adverse effect on the Company's consolidated financial position
and results of operations.

      REGULATORY MATTERS. In April and June 1996, CSC-UK acquired J&J Securities
Limited (the "J&J Acquisition") and Greyfriars Group Limited (formerly known as
Heritable Finance Limited) (the "Greyfriars Acquisition"), respectively. In
October 1996, the Company received a request from the staff of the Securities
and Exchange Commission (the "Commission") for additional information concerning
the Company's voluntary restatement of its financial statements for the quarter
ended June 30, 1996. The Company initially valued the mortgage loans in the J&J
Acquisition and the Greyfriars Acquisition at the respective fair value which
were estimated to approximate par (or historical book value). Upon the
subsequent sale of the mortgage portfolios, the Company recognized the fair
value of the mortgage servicing receivables retained and recorded a
corresponding gain for the fair value of such mortgage servicing receivables.
Upon subsequent review, the Company determined that the fair value of such
mortgage servicing rights should have been included as part of the fair value of
the mortgage loans acquired as a result of such acquisitions. The effect of this
accounting change resulted in a reduction in reported earnings of $26.5 million.
Additionally, as a result of this accounting change, the goodwill initially
recorded in connection with such acquisitions was reduced resulting in a
reduction of goodwill amortization of approximately $496,000 from the previously
reported figure for the second quarter. On November 19, 1996, the Company
announced that it had determined that certain additional adjustments relating to
the J&J Acquisition and the Greyfriars Acquisition should be made to the
financial statements for the quarter ended June 30, 1996. These adjustments
reflect a change in the accounting treatment with respect to restructuring
charges and deferred taxes recorded as a result of such acquisitions. This
caused an increase in the amount of goodwill recorded which resulted in an
increase of amortization expense as previously reported in the second quarter of
1996 of $170,692. The staff of the Commission has requested additional
information from the Company in connection with the accounting related to the
J&J Acquisition and the Greyfriars Acquisition. The Company is supplying such
requested information. In mid-October 1997, the Commission authorized its staff
to conduct a formal investigation which, to date, has continued to focus on the
issues surrounding the restatement of the financial statements for the quarter
ended June 30, 1996. The Company is continuing to cooperate fully in this
matter, however, the Commission has not contacted the Company on this matter
since July 1999.

      As a result of its negative operating results, the Company received
inquiries in 1998 from the State of New York Department of Banking regarding the
Company's qualifications to continue to hold a

                                       50
<PAGE>
mortgage banking license. In connection with such inquiries, the Company agreed
to provide the banking department with certain information and to certain
restrictions on its business. The Company provided the necessary information and
complied with the restrictions on its business through July 29, 1999, when the
Company voluntarily surrendered its New York mortgage banking licenses. After
that date, the Company no longer conducted any mortgage banking activities in
New York and therefore ceased submitting information to the banking department.

      UK SALE AGREEMENT. On September 4, 1998, CSC-UK commenced proceedings in
the High Court of Justice, London against Ocwen for the payment of certain sums
due under the UK Sale Agreement (the "Proceedings"). Although Ocwen initially
informed CSC-UK that it would defend the Proceedings, Ocwen then satisfied
CSC-UK's claim by paying CSC-UK (pound)1.7 million ($2.8 million) on November
24, 1998. Prior to CSC-UK initiating the Proceedings, Ocwen informed CSC-UK that
it would defend the (then proposed) Proceedings on the basis that any sums owed
by Ocwen to CSC-UK should be set off or extinguished against a sum which Ocwen
claimed was due or, alternatively, was recoverable by it from CSC-UK on the
grounds of CSC-UK's breach of warranty or misrepresentation with respect to
matters concerning loans of Greyfriars (the "Alleged Loan Liabilities"). With
respect to the Alleged Loan Liabilities, Ocwen claimed that CSC-UK had
excessively charged borrowers, failed to notify borrowers of interest rate rises
and failed to advise borrowers of increased repayments. Ocwen claimed that these
liabilities totaled approximately (pound)13.0 million ($21.2 million).
Additionally, pursuant to the UK Sale Agreement, Ocwen held back a sum of
(pound)3.5 million ($5.7 million) with respect to the purchase price, pending
the determination of certain other figures under the UK Sale Agreement (the
"Holdback"), which sum was paid into a Holdback account at the time of the UK
Sale Agreement.

      On February 15, 1999, the Company, Ocwen and certain of their subsidiaries
entered into a settlement agreement, in full and final settlement of all causes
of action, claims, demands, liabilities, damages, costs, charges and expenses
that the Company, CSC-UK and Ocwen and their respective subsidiaries may have
against each other. Such claims include Ocwen's alleged claim against the
Company and/or CSC-UK with respect to the Alleged Loan Liabilities. Under the
settlement agreement, in June 1999 CSC-UK was paid $3.1 million from the
Holdback account, and Ocwen was paid approximately $2.6 million from the
Holdback account. The Bankruptcy Court approved the settlement agreement.

In the normal course of business, aside from the matters discussed above, the
Company is subject to various legal proceedings and claims, the resolution of
which, in management's opinion, will not have a material adverse effect on the
consolidated financial position or the results of operations of the Company.

19.   CONCENTRATIONS OF CREDIT

For the years ended December 31, 1998 and 1997, revenues from loan sales and
loan servicing constituted the primary source of the Company's revenues. For the
years ended December 31, 1998 and 1997, there were not institutional purchasers
who accounted for more than 10% of the total revenues.

The Reorganized Company has not engaged in any material operations since July 1,
1999. The major source of revenues has been the investment of available funds in
high-grade commercial paper.

                                       51
<PAGE>
20.   FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value of
each class of financial instruments for which it is practicable to estimate that
value:

      Cash and cash equivalents: The carrying amount of cash on hand and money
market funds is considered to be a reasonable estimate of fair market value.

      Residual certificates: The fair value on the Company's Sav*-A-Loan(R)
residual certificates was determined by using estimated discounted future cash
flows taking into consideration the current interest rate environment, current
prepayment rates and default experience. Such securities are carried at fair
value. There was not a value assigned to the Company's home equity residual
certificates.

      Mortgage loans held for sale, net: The fair values were estimated by using
current institutional purchaser yield requirements. The fair value of the
mortgage loans held for sale, net totaled $14.3 million and $123.3 million at
December 31, 1999 and 1998, respectively.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
         AND FINANCIAL DISCLOSURE

None.

                                       52
<PAGE>
                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by this item appears in the sections entitled "Nominees
for Directors" and "Compensation of Executive Officers and Directors" in the
Company's Proxy Statement relating to the 2000 Annual Meeting of Shareholders,
which information is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item appears in the section entitled "Executive
Compensation" in the Company's Proxy Statement relating to the 2000 Annual
Meeting of Shareholders, which information is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by this item appears in the section entitled "Security
Ownership of Certain Beneficial Owners and Management Transactions" in the
Company's Proxy Statement relating to the 2000 Annual Meeting of Shareholders,
which information is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item appears in the section entitled "Certain
Relationship and Related Transactions" in the Company's Proxy Statement relating
to the 2000 Annual Meeting of Shareholders, which information is incorporated
herein by reference.

                                       53
<PAGE>
                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

         (a)  Documents filed as part of this report:

              1.  Financial Statements included in Item 8:

                  AMC Financial, Inc. and Subsidiaries Consolidated Financial
                  Statements:

                  Independent Auditors' Report

                  Consolidated Statements of Financial Condition as of December
                  31, 1999 and 1998

                  Consolidated Statements of Operations for the six months ended
                  December 31, 1999 and June 30, 1999, and the years ended
                  December 31, 1998 and 1997

                  Consolidated Statements of Stockholders' Equity (Deficit) for
                  the six months ended December 31, 1999 and June 30, 1999, and
                  the years ended December 31, 1998 and 1997

                  Consolidated Statements of Cash Flows for the six months ended
                  December 31, 1999 and June 30, 1999, and for the years ended
                  December 31, 1998 and 1997

              2.  Financial Statement Schedules:  None

              3.  Exhibits:


EXHIBIT
NUMBER        DESCRIPTION OF EXHIBIT
-------       ----------------------

3.1**       Amended and Restated Certificate of Incorporation of the Company,
            incorporated by reference to Exhibit 3.1 to the Company's Form 10-Q
            filed with the Commission on August 16, 1999.

3.2**       Amended and Restated Bylaws of the Company, incorporated by
            reference to Exhibit 3.2 to the Company's Form 10-Q filed with the
            Commission on August 16, 1999.

10.1**      Post-Petition Loan and Security Agreement, dated as of October 12,
            1998, between CSC and Greenwich Capital Financial Products, Inc.,
            incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q
            filed with the Commission on November 17, 1998

10.2**      Revolving Credit and Security Agreement, dated as of October 12,
            1998, between the Company and The CIT Group/Equipment Financing,
            Inc., incorporated by reference to Exhibit 10.2 to the Company's
            Form 10-Q filed with the Commission on November 17, 1998

                                       54
<PAGE>
10.3**      Employee Agreement, dated July 2, 1998, between CSC and Cheryl P.
            Carl, incorporated by reference to Exhibit 10.4 to the Company's
            Form 10-Q filed with the Commission on August 12, 1998

10.4**      Employment Agreement, dated July 2, 1998, between CSC and Peter
            Kucma, incorporated by reference to Exhibit 10.5 to the Company Form
            10-Q filed with the Commission on August 12, 1998

10.5**      Employment Agreement, dated July 2, 1998, between CSC and Tim S.
            Ledwick, incorporated by reference to Exhibit 10.8 to the Company's
            Form 10-Q filed with the Commission on August 12, 1998

10.6**      Sub-Tenant Estoppel Certificate, dated as of January 20, 1999,
            between CSC and Taxter Park, incorporated by reference to Exhibit
            10.8 to the Company's Form 10-K filed with the Commission on March
            31, 1999

10.7**      Surrender of Lease and Temporary Rental Agreement, dated as of
            February 18, 1999, between CSC and Mack-Cali Mid-West Realty
            Associates LLC, incorporated by reference to Exhibit 10.9 to the
            Company's Form 10-K filed with the Commission on March 31, 1999

10.8**      Extension Agreement, dated as of February 28, 1999, between CSC and
            Greenwich Capital Financial Products, Inc., incorporated by
            reference to Exhibit 10.10 to the Company's Form 10-K filed with the
            Commission on March 31, 1999

10.9**      First Amendment to Revolving Credit and Security Agreement, dated as
            of February 28, 1999, between CSC and The CIT Group/Equipment
            Financing, Inc., incorporated by reference to Exhibit 10.11 to the
            Company's Form 10-K filed with the Commission on March 31, 1999

10.10**     Agreement with AEGIS Mortgage Corporation - Service Agreement, dated
            as of September 1, 1999, incorporated by reference to Exhibit 10.1
            to the Company's Form 10-Q filed with the Commission on November 12,
            1999

21.1*       Subsidiaries of the Company

23.1*       Consent of KPMG LLP

27.1*       Financial Data Schedule for the year ended December 31, 1999

99.1**      Solicitation and Disclosure Statement, dated as of August 28, 1998,
            incorporated by reference to Exhibit 99.1 to the Company's Form 8-K
            filed with the Commission on September 4, 1998

                                       55
<PAGE>
99.2**      The Company's and CSC's First Amended Joint Plan of Reorganization,
            dated as of April 27, 1999, incorporated by reference to Exhibit 2.1
            to the Company's Form 8-K filed with the Commission on June 30, 1999

99.3*       The Company's and CSC's First Amended Joint Disclosure Statement,
            dated April 27, 1999, including: Exhibit A: the Company's and CSC's
            First Amended Joint Plan of Reorganization dated as of April 27,
            1999; Exhibit B: Examiner's Report; Exhibit C: Balance Sheet and
            Projected Financial Information and Exhibit D: Liquidation Analysis.

*           Filed herewith

**          Indicates documents incorporated by reference from the prior filing
            indicated

Reports on Form 8-K:  None

                                       56
<PAGE>
                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

                                    AMC FINANCIAL, INC.



                                    By: /s/ D. RICHARD THOMPSON
                                       -----------------------------------------
                                        D. Richard Thompson
                                    Title: Chief Executive Officer and President

                                    By: /s/ MICHAEL L. KENNEMER
                                       -----------------------------------------
                                       Michael L. Kennemer
                                    Title:  Chief Financial Officer

Date:  April 11, 2000

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the date indicated.

<TABLE>
<CAPTION>
                <S>                                              <C>
                SIGNATURE                                        TITLE
                ---------                                        -----

  /s/ D. RICHARD THOMPSON                    Chief Executive Officer, President and Director
-------------------------------------------  (Principal Executive Officer)
      D. Richard Thompson

  /s/ MARK A. NEPORENT
-------------------------------------------
      Mark A. Neporent                       Director


-------------------------------------------
      Todd R. Snyder                         Director

  /s/ RAYMOND H. WECHSLER
-------------------------------------------
      Raymond H. Wechsler                    Director


  /s/ MICHAEL L. KENNEMER                    Executive Vice President, Chief Financial Officer
-------------------------------------------  (Principal financial officer and principal
      Michael L. Kennemer                    accounting officer)

April 11, 2000
</TABLE>

                                       57