SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

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

For the Quarterly Period Ended June 30, 2000



Or

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

For the transition period from                        to
                             Commission file number 0-29120

                           MICROCAP LIQUIDATING TRUST

                     (Successor to The MicroCap Fund, Inc.)

--------------------------------------------------------------------------------
                (Exact Name of Registrant as Specified in its Charter)


New York                                                             13-7110611
--------------------------------------------------------------------------------
(State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
Incorporation or Organization)


c/o Raymond S. Troubh
Ten Rockefeller Plaza, Suite 712
New York, New York                                                     10020
--------------------------------------------------------------------------------
(Address of Principal Executive Offices)                             (Zip Code)


Registrant's Telephone Number, Including Area Code:  (800) 821-0905


Not applicable

--------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last report


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common  stock as of the latest  practicable  date.  As of May 1, 2000 there were
2,427,281 units of beneficial interest outstanding.


<PAGE>


                           MICROCAP LIQUIDATING TRUST

                       (SUCCESSOR TO THE MICROCAP FUND, INC.)
                                      INDEX

PART I.       FINANCIAL INFORMATION

Item 1.       Financial Statements.

Statements of Net Assets in Liquidation as of June 30, 2000 (Unaudited) and
December 31, 1999

Schedule of Portfolio Investments as of June 30, 2000 (Unaudited)

Statements of Operations for the Three and Six Months ended June 30, 2000 and
1999 (Unaudited)

Statements  of Changes in Net Assets for the Six Months  ended June 30, 2000 and
1999 (Unaudited)

Statements of Cash Flows for the Six Months ended June 30, 2000 and 1999
(Unaudited)

Notes to Financial Statements (Unaudited)

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

Item 3.       Quantitative and Qualitative Disclosure about Market Risk.


PART II.      OTHER INFORMATION

Item 1.       Legal Proceedings.

Item 2.       Changes in Securities.

Item 3.       Defaults upon Senior Securities.

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

Item 5.       Other Information.

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



<PAGE>


MICROCAP LIQUIDATING TRUST
(Successor to The MicroCap Fund, Inc.)
STATEMENTS OF ASSETS AND LIABILITIES
<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                                                                               June 30,
                                                                                                 2000           December 31,
                                                                                              (Unaudited)            1999
                                                                                            --------------     ----------------
Assets

Portfolio investments at fair value (cost $1,937,500 as of
   June 30, 2000 and December 31, 1999)                                                     $       457,500    $        484,375
Cash and cash equivalents - unrestricted                                                          1,488,549           1,348,193
Cash and cash equivalents - restricted                                                                    -             120,000
Accrued interest receivable                                                                           7,393               6,225
                                                                                            ---------------    ----------------
   Total assets                                                                                   1,953,442           1,958,793
                                                                                            ---------------    ----------------

Liabilities

Accrued distribution payable                                                                              -             970,912
Accounts payable and accrued expenses                                                                25,642              29,118
                                                                                            ---------------    ----------------
   Total liabilities                                                                                 25,642           1,000,030
                                                                                            ---------------    ----------------

Net Assets in Liquidation                                                                   $     1,927,800    $        958,763
                                                                                            ===============    ================


Net assets in liquidation per Unit of beneficial interest                                          $   0.79            $   0.39
                                                                                                   ========            ========


Number of Units of beneficial interest outstanding                                                2,427,281           2,427,281
                                                                                                  =========           =========


</TABLE>










See notes to financial statements.


<PAGE>


MICROCAP LIQUIDATING TRUST
(Successor to The MicroCap Fund, Inc.)
SCHEDULE OF PORTFOLIO INVESTMENTS (Unaudited)
As of June 30, 2000
<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                                                                                                      Fair Value
                                                                                                      Fair             as a % of
Issuer / Position                                                                   Cost              Value          Net Assets(1)
----------------------------------------------------------------------------------------------------------------------------------

Privately-Held Securities:

First Colony Coffee and Tea Company (A)
106,562 shares of Series A1 Preferred Stock                                   $       594,174     $     140,600
240,179 shares of Series B1 Preferred Stock                                         1,343,326           316,900
                                                                              ---------------     -------------
                                                                                    1,937,500           457,500        23.73 %
                                                                              ---------------     -------------       --------

Total Portfolio Investments (B)                                               $     1,937,500     $     457,500        23.73 %
                                                                              ===============     =============       ========

</TABLE>

(1)  Represents fair value as a percentage of the Trust's total net assets.

(A)  On April 14, 2000, the Trust entered into an option  agreement  whereby the
     optionee  has the right to purchase  the Trust's  holdings of First  Colony
     Coffee and Tea Company for $457,500.  The Trust  received  $25,000 from the
     sale of such option, which expires on January 8, 2001.

(B)  During the quarter,  the Trust  liquidated  its  remaining  130,000  common
     shares  of  Unigene  Laboratories,  Inc.  for  net  proceeds  of  $325,398,
     realizing a gain of $146,648.

     See notes to financial statements.


<PAGE>


MICROCAP LIQUIDATING TRUST
(Successor to The MicroCap Fund, Inc.)
STATEMENTS OF OPERATIONS (Unaudited)
<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                                                                    Three Months              Three Months
                                                                                   Ended June 30,            Ended June 30,
                                                                                        2000                      1999
                                                                                 -------------------      ------------------
Investment Income and Expenses

Income:
   Interest from U.S. Treasury Bills and repurchase agreements                       $     20,410            $     17,024
   Income from sale of option                                                              25,000                       -
                                                                                     ------------            ------------
   Total investment income                                                                 45,410                  17,024
                                                                                     ------------            ------------

Expenses:
   Trustee fees                                                                            12,750                  25,500
   Administrative fees                                                                     19,664                  20,010
   Legal fees                                                                               1,500                      55
   Accounting fees                                                                          9,875                   4,500
   Transfer agent and custodian fees                                                        3,912                   5,168
   Mailing and printing expenses                                                              504                      39
   Other operating expenses                                                                   569                     105
                                                                                     ------------            ------------
   Total expenses                                                                          48,774                  55,377
                                                                                     ------------            ------------

Net Investment Loss                                                                        (3,364)                (38,353)
                                                                                     ------------            ------------

Net realized gain from portfolio investments                                              146,648                       -
Change in net unrealized depreciation of investments                                     (221,875)                      -
                                                                                     ------------            ------------
Net realized and unrealized gain from portfolio investments                               (75,227)                      -
                                                                                     ------------            ------------

Net Decrease in Net Assets in Liquidation                                            $    (78,591)           $    (38,353)
                                                                                     ============            ============


</TABLE>



See notes to financial statements.


<PAGE>


MICROCAP LIQUIDATING TRUST
(Successor to The MicroCap Fund, Inc.)
STATEMENTS OF OPERATIONS (Unaudited)
<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                                                                     Six Months                Six Months
                                                                                   Ended June 30,            Ended June 30,
                                                                                        2000                      1999
                                                                                 -------------------      ------------------
Investment Income and Expenses

Income:
   Interest from U.S. Treasury Bills and repurchase agreements                      $      31,012            $     57,958
   Income from sale of option                                                              25,000                       -
                                                                                    -------------            ------------
   Total investment income                                                                 56,012                  57,958
                                                                                    -------------            ------------

Expenses:
   Trustee fees                                                                            35,209                  69,205
   Administrative fees                                                                     40,500                  39,639
   Legal fees                                                                               1,500                   7,314
   Accounting fees                                                                         20,050                  15,500
   Transfer agent and custodian fees                                                        7,639                  10,584
   Litigation expense                                                                           -                   3,225
   Mailing and printing expenses                                                            1,204                      39
   Other operating expenses                                                                   604                     381
                                                                                    -------------            ------------
   Total expenses                                                                         106,706                 145,887
                                                                                    -------------            ------------

Net Investment Loss                                                                       (50,694)                (87,929)
                                                                                    -------------            ------------

Net realized gain from portfolio investments                                            1,046,606                       -
Change in net unrealized depreciation of investments                                      (26,875)                      -
                                                                                    -------------            ------------
Net realized and unrealized gain from portfolio investments                             1,019,731                       -
                                                                                    -------------            ------------

Net Increase (Decrease) in Net Assets in Liquidation                                $     969,037            $    (87,929)
                                                                                    =============            ============

</TABLE>

See notes to financial statements.


<PAGE>


MICROCAP LIQUIDATING TRUST
(Successor to The MicroCap Fund, Inc.)
STATEMENTS OF CHANGES IN NET ASSETS (Unaudited)
<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>


                                                                                       Six Months               Six Months
                                                                                     Ended June 30,           Ended June 30,
                                                                                          2000                     1999
                                                                                  -------------------      -------------------
Changes in net assets resulting from operations:

Net investment loss                                                                 $       (50,694)        $       (87,929)
Net realized gain from portfolio investments                                              1,046,606                       -
Change in net unrealized depreciation of investments                                        (26,875)                      -
                                                                                    ---------------         ---------------
Net increase (decrease) in net assets resulting from operations                             969,037                 (87,929)
                                                                                    ---------------         ---------------

Change in net assets from distributions:

Cash distributions                                                                                -              (1,820,461)
                                                                                    ---------------         ---------------

Increase (decrease) in net assets in liquidation                                            969,037              (1,908,390)

Net assets in liquidation at beginning of period                                            958,763               3,793,538
                                                                                    ---------------         ---------------

N  et Assets in Liquidation at End of Period                                        $     1,927,800         $     1,885,148
                                                                                    ===============         ===============


Net assets per unit of beneficial interest                                               $     0.79               $    0.78
                                                                                         ==========               =========

Number of units of beneficial interest                                                    2,427,281               2,427,281
                                                                                          =========               =========


</TABLE>



See notes to financial statements.


<PAGE>


MICROCAP LIQUIDATING TRUST
(Successor to The MicroCap Fund, Inc.)
STATEMENTS OF CASH FLOWS (Unaudited)
<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                                                                     Six Months                Six Months
                                                                                 Ended June 30,              Ended June 30,
                                                                                        2000                      1999
                                                                                 -------------------      ------------------

Cash Flows Used For Operating Activities

Net investment loss                                                                 $       (50,694)        $       (87,929)
Adjustments to reconcile net investment loss to cash
   used for operating activities:
Decrease in liabilities                                                                      (3,476)               (343,389)
(Decrease) increase in accrued interest                                                      (1,168)                 59,328
                                                                                    ---------------         ---------------
Cash flows used for operating activities                                                    (55,338)               (371,990)
                                                                                    ---------------         ---------------

Cash Flows Used For Investing Activities

Cost to exercise warrants                                                                  (653,125)                      -
Net proceeds from the sale of portfolio investments                                       1,699,731                       -
                                                                                    ---------------         ---------------
Cash flows from investing activities                                                      1,046,606                       -
                                                                                    ---------------         ---------------

Cash Flows Used For Financing Activities

Cash distributions paid                                                                    (970,912)             (1,820,461)
                                                                                    ---------------         ---------------
Cash flows used for financing activities                                                   (970,912)             (1,820,461)
                                                                                    ---------------         ---------------

Increase (decrease) in cash and cash equivalents                                             20,356              (2,192,451)

Cash and cash equivalents at beginning of period                                          1,468,193               3,604,050
                                                                                    ---------------         ---------------

Cash and Cash Equivalents at End of Period                                          $     1,488,549         $     1,411,599
                                                                                    ===============         ===============

</TABLE>




See notes to financial statements.


<PAGE>


MICROCAP LIQUIDATING TRUST
(Successor to The MicroCap Fund, Inc.)
NOTES TO FINANCIAL STATEMENTS (Unaudited)

1.     Organization and Purpose

The MicroCap  Liquidating  Trust (the "Trust"),  a liquidating trust established
under the laws of the State of New York, is the successor entity to The MicroCap
Fund, Inc., formerly Commonwealth Associates Growth Fund, Inc. (the "Fund"). The
Fund,  which was a  Maryland  corporation  formed on  January  26,  1993,  was a
non-diversified,  closed-end  management  investment  company and  operated as a
business  development  company  under the  Investment  Company Act of 1940.  The
Fund's investment  objective was to achieve  long-term  capital  appreciation of
assets,  rather than current income,  by investing in debt and equity securities
of  emerging  and  established   companies  that  management   believed  offered
significant growth potential.

Pursuant to its Plan of Liquidation,  which was approved at a special meeting of
shareholders on July 23, 1996, the Fund  transferred all of its remaining assets
and its remaining fixed and contingent liabilities to the Trust, effective as of
the close of business on February 24, 1997, the Fund's termination date.

Also  effective as of the close of business on February 24, 1997,  the 2,188,085
common  shares and 191,357  preferred  shares of the Fund,  outstanding  on such
date,  were  automatically  deemed to represent  2,427,281  units of  beneficial
interest  in the Trust  ("Units").  As a result,  on  February  24,  1997,  each
shareholder  of the Fund  received  one Unit of the Trust for each  share of the
Fund's common stock held on such date and 1.25 Units of the Trust for each share
of the Fund's preferred stock held on such date.

2.       Significant Accounting Policies

Valuation of  Investments - Portfolio  investments  are carried at fair value as
determined  quarterly  by the  Trustee.  The fair  value  of each  publicly-held
portfolio  security is adjusted to the closing  public  market price on the last
day of the  calendar  quarter  discounted  by a  factor  of 0% to 20% for  sales
restrictions,  if any. Factors considered in the determination of an appropriate
discount include:  underwriter lock-up,  affiliate status by owning greater than
10% of the  outstanding  shares of a  portfolio  security,  and other  liquidity
factors such as the size of the Trust's  position in a given  portfolio  company
compared to the trading history of the public security. Privately-held portfolio
securities  are carried at cost until  significant  developments  affecting  the
portfolio company provide a basis for change in valuation, including adjustments
to reflect meaningful third-party transactions in the private market.

Use of Estimates - The  preparation of financial  statements in conformity  with
generally  accepted  accounting  principles  in the  United  States  of  America
requires  management to make estimates and assumptions  that affect the reported
amounts  of assets and  liabilities  and  disclosure  of  contingent  assets and
liabilities at the date of the financial  statements and the reported amounts of
revenues and expenses during the reporting  period.  Actual results could differ
from those estimates.

Investment  Transactions  - Realized  gains and losses on  investments  sold are
computed on a specific  identification basis. The Trust records its transactions
on the accrual method.

Income Taxes - The Trust is a complete  pass-through  entity for federal  income
tax  purposes  and,  accordingly,  is not subject to income tax.  Instead,  each
beneficiary  of the Trust is required to take into account,  in accordance  with
such  beneficiary's  method of accounting,  such beneficiary's pro rata share of
the Trust's income, gain, loss,  deduction or expense,  regardless of the amount
or timing of distributions to beneficiaries.


<PAGE>


MICROCAP LIQUIDATING TRUST
(Successor to The MicroCap Fund, Inc.)
NOTES TO FINANCIAL STATEMENTS (Unaudited), continued

Cash and  Cash  Equivalents  - The  Trust  invests  its  available  cash in U.S.
Treasury Bills and overnight repurchase agreements  collateralized by securities
issued by the U.S.  Government or its agencies.  Such investments are considered
to be cash equivalents for the statement of cash flows.

3.     Trustee Fees

In July 1996,  the Fund entered  into an agreement  with Raymond S. Troubh,
whereby Mr. Troubh provided  management  services to the Fund in connection with
its Plan of  Liquidation.  Mr.  Troubh has continued to provide such services to
the Trust during its liquidation. For services rendered under the agreement, Mr.
Troubh received $8,500 per month through  December 1999.  Commencing  January 1,
2000, Mr. Troubh voluntarily reduced his compensation for management services by
50% to $4,250 per month.  Additionally,  Mr.  Troubh is paid 1% of the amount of
each  distribution  (other  than the  initial  distribution  paid by the Fund on
August 30, 1996).

4.     Sale of Option to Purchase Portfolio Investment

On April 14,  2000,  the Trust  entered  into an option  agreement  whereby  the
optionee has the right to purchase the Trust's  holdings of First Colony  Coffee
and Tea Company for $457,500.  The Trust received  $25,000 from the sale of such
option, which expires on January 8, 2001.

5.     Other Information

On July 15, 1996,  the Fund entered into a settlement  agreement with a group of
shareholders of the Fund's common stock that had solicited proxies in opposition
to the  Fund's  Plan of  Liquidation  (the "13D  Group").  Under the  settlement
agreement, the Fund and the 13D Group agreed, among other things, that the Trust
would  reimburse the 13D Group for its reasonable  out of pocket  expenses up to
$120,000,  subject to approval by the  Securities and Exchange  Commission  (the
"SEC").  An application  relating to such  reimbursement by the Trust to the 13D
Group was filed with the SEC on September  27, 1996. In February  2000,  the 13D
Group  agreed to release  the Trust  from any and all  claims  for such  expense
reimbursement.

6.     Cash Distribution

On January 28, 2000, the Trust paid a $0.40 per share cash distribution totaling
$970,912 to unit holders of record on January 14, 2000.  Such  distribution  was
declared and accrued for in December 1999.

7.     Subsequent Event - Cash Distribution

In July 2000, the Trust announced the declaration of a liquidating  distribution
of  $970,912,  or $0.40 per share,  to unit  holders of record on July 31, 2000.
Such distribution will be paid on August 15, 2000.


<PAGE>


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

Liquidity and Capital Resources

During the six months ended June 30, 2000,  the Trust  exercised  its warrant to
purchase  475,000  common  shares of Unigene  Laboratories,  Inc.  at $1.375 per
share, or $653,125. During the six-month period, the Trust sold these shares for
net proceeds of $1,699,731, or $3.58 per share.

On April 14, 2000, the Trust entered into an option agreement whereby the holder
has the right to purchase the Trust's  investment in First Colony Coffee and Tea
Company for $457,500.  The Trust received  $25,000 from the sale of such option,
which expires on January 8, 2001.

As of June  30,  2000,  the  Trust  held  cash  and  cash  equivalents  totaling
$1,488,549.  Such cash balances are invested in U.S. Treasury Bills or overnight
repurchase agreements collateralized by securities issued by the U.S. Government
or its  agencies.  Interest  earned from such  investments  for the three months
ended  June 30,  2000 and  1999,  totaled  $20,410  and  $17,024,  respectively.
Interest  earned  from such  cash  balances  in future  periods  is  subject  to
fluctuations  in  short-term  interest  rates  and  changes  in cash  equivalent
balances held by the Trust. The Trust had no restricted cash balances as of June
30, 2000.

In July 2000, the Trust announced the declaration of a liquidating  distribution
of  $970,912,  or $0.40 per share,  to unit  holders of record on July 31, 2000.
Such distribution will be paid on August 15, 2000.

Results of Operations

The Trust is  pursuing  the  orderly  liquidation  of its assets and  subsequent
distribution  to unit holders of the proceeds from such  liquidation,  including
the Trust's  remaining  cash  balances,  after payment of, or provision for, all
current, future and contingent liabilities.  Prior to the creation of the Trust,
the Fund had begun to pursue  this  objective  upon the  approval of its Plan of
Liquidation in July 1996.

Realized Gains and Losses from Portfolio Investments

For the three and six months ended June 30,  2000,  the Trust had a net realized
gain from its portfolio investments of $146,648 and $1,046,606, respectively. As
discussed  above,  during the six months ended June 30, 2000, the Trust acquired
475,000 common shares of Unigene Laboratories,  Inc. through the exercise of its
warrant  to  purchase  such  shares  at $1.375  per  share.  The Trust  sold its
remaining  130,000 shares of Unigene during the three months ended June 30, 2000
for net proceeds of $325,398 compared to a cost of $178,750, realizing a gain of
$146,648.  All of the 475,000  common shares of Unigene were sold during the six
months ended June 30, 2000 for net proceeds of $1,699,731  compared to a cost of
$653,125, realizing a gain of $1,046,606.

The Trust had no realized gains or losses from portfolio  investments during the
three and six months ended June 30, 1999.

Unrealized Gains and Losses from Portfolio Investments

For the six months  ended  June 30,  2000,  the Trust had a $26,875  unfavorable
change in net unrealized depreciation of investments resulting from the downward
revaluation of its  investment in First Colony Coffee and Tea Company.  As noted
above,  in April 2000,  the Trust entered into an option  agreement  whereby the
holder has the right to purchase the Trust's  investment  in First Colony Coffee
and Tea  Company for  $457,500.  As of June 30,  2000,  the Trust had valued its
investment in First Colony at the $457,500 option price.

Investment Income and Expenses

For the  three  months  ended  June  30,  2000 and  1999,  the  Trust  had a net
investment  loss (interest and other income less  operating  expenses) of $3,364
and $38,353,  respectively. For the six months ended June 30, 2000 and 1999, the
Trust had a net investment loss of $50,694 and $87,929, respectively.

The net  investment  loss of $3,364 for the three  months  ended  June 30,  2000
compared  to the net  investment  loss of $38,353  for the same  period in 1999,
resulted from a $28,386  increase in investment  income and a $6,603 decrease in
operating  expenses.  The  increase  in  investment  income for the 2000  period
compared  to the same  period in 1999  included  a  one-time  payment of $25,000
received by the Trust in April 2000, in connection with the sale of an option to
purchase its  investment in First Colony,  as discussed  above.  The increase in
investment  income  also  included a $3,386  increase  in  interest  income from
short-term  investments,  resulting  from an increase in funds  invested in such
securities  during the three  months  ended June 30,  2000  compared to the same
period in 1999. The $6,603  decrease in operating  expenses for the three months
ended June 30,  2000  compared  to the same  period in 1999,  includes a $12,750
reduction in fees paid to the Trustee. For services rendered under, the Trustee,
Mr.  Raymond  S.  Troubh,  received  $8,500  per month  through  December  1999.
Commencing January 1, 2000, Mr. Troubh voluntarily  reduced his compensation for
management services by 50% to $4,250 per month. As a result, the regular Trustee
fees  declined  $12,750 for the three months ended June 30, 2000 compared to the
same period in 1999.  The reduced  Trustee fees were offset by a net increase in
the other operating  expenses,  primarily due an increase in outside  accounting
fees.

The net  investment  loss of $50,694  for the six months  ended June 30, 2000 as
compared  to the net  investment  loss of $87,929  for the same  period in 1999,
resulted from $39,181 decrease in operating expenses slightly offset by a $1,946
decrease in  investment  income.  The decrease in investment  income  includes a
$26,946  reduction in interest income from  short-term  investments for the 2000
period as  compared to the same period in 1999,  resulting  from a reduction  of
funds  invested  in such  securities  during the six months  ended June 30, 2000
compared  to the same  period in 1999.  This  decrease  in  interest  income was
partially  offset by the  one-time  payment of $25,000  received by the Trust in
April 2000, in connection  with the sale of an option to purchase its investment
in First Colony, as discussed above. The decrease in operating  expenses for the
six  months  ended  June 30,  2000,  as  compared  to the same  period  in 1999,
primarily was due to a $33,996 decline in Trustee fees. As discussed  above, the
regular  monthly fee paid to the Trustee was reduced by 50% beginning on January
1, 2000,  accounting for $25,500 of this decrease.  Additionally,  Mr. Troubh is
paid 1% of the amount of each distribution paid to beneficial holders.  For cash
distributions  paid during the three months  ended March 31, 2000 and 1999,  Mr.
Troubh was paid $9,709 and $18,205,  respectively.  On a net basis,  the Trust's
other operating  expenses declined $5,185 for the six months ended June 30, 2000
compared to the same period in 1999.

Net Assets in Liquidation

As of June 30, 2000, net assets in liquidation totaled  $1,927,800,  an increase
of $969,037 from net assets in  liquidation of $958,763 as of December 31, 1999.
This increase is the result of the $1,046,616 realized gain from the sale of the
Trust's investment in Unigene  Laboratories,  offset by the $26,875  unfavorable
change in unrealized  depreciation of investments and the $50,694 net investment
loss for the six months ended June 30, 2000. As of June 30, 2000,  the net asset
value  per  Unit of  beneficial  interest  was  $0.79,  compared  to $0.39 as of
December 31, 1999.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

The Trust is subject to market  risk  arising  from  changes in the value of its
portfolio  investments,  investments in U.S. Treasury Bills and interest-bearing
cash  equivalents,  which may result from  fluctuations  in  interest  rates and
equity prices.  The Trust has calculated its market risk related to its holdings
of these  investments  based on changes  in  interest  rates and  equity  prices
utilizing  a  sensitivity  analysis.  The  sensitivity  analysis  estimates  the
hypothetical  change in fair values, cash flows and earnings based on an assumed
10% change  (increase  or  decrease)  in interest  rates and equity  prices.  To
perform the  sensitivity  analysis,  the assumed 10% change is applied to market
rates  and  prices  on  investments  held  by the  Trust  as of  the  end of the
accounting period.

The Trust's portfolio  investments had an aggregate fair value of $457,500 as of
June 30,  2000.  An assumed 10% decline  from this fair value would  result in a
reduction  to the  fair  value of such  investments  and an  unrealized  loss of
$45,750.

Market  risk  relating  to  the  Trust's   interest-bearing   cash  equivalents,
investments  in  U.S.  Treasury  Bills  and  overnight   repurchase   agreements
collateralized by securities issued by the U.S.  Government or its agencies held
as of June 30, 2000 is considered to be immaterial.


<PAGE>


                           PART II - OTHER INFORMATION

Item 1.       Legal Proceedings.
              -----------------

Not applicable.

Item 2.       Changes in Securities.
              ---------------------

Not applicable.

Item 3.       Defaults Upon Senior Securities.
              -------------------------------

Not applicable.

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

No matter was brought to a vote of security holders during the period covered by
this report.

Item 5.       Other Information.
              -----------------

Not applicable.

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

              (a)  Exhibits

                    (27)   Financial Data Schedule

              (b)  Reports on Form 8-K

                   None.


<PAGE>


                                   SIGNATURES

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

              MICROCAP LIQUIDATING TRUST


              /s/    Raymond S. Troubh

              Raymond S. Troubh
              Trustee

Date:         August 14, 2000