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, 1999
                                                             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 0-19407

                         LASER-PACIFIC MEDIA CORPORATION
             (Exact name of registrant as specified in its charter)

                               Delaware 95-3824617
                (State or other jurisdiction of (I.R.S. Employer
               incorporation or organization) Identification No.)

809 N. Cahuenga  Blvd.  Hollywood,  California  90038 (323)  462-6266  (Address,
including  zip code and  telephone  number,  including  area  code of  principal
executive offices)


     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

     The number of shares  outstanding  of each of the  registrant's  classes of
common stock, as of July 31, 1999 was 7,585,010  shares of Common Stock,  $.0001
par value.



<PAGE>

                        LASER-PACIFIC MEDIA CORPORATION
                                AND SUBSIDIARIES

                                Table of Contents

                                                                          Page

Part I.  Financial Information

Item 1.  Condensed Consolidated Financial Statements                        3

            Condensed Consolidated Balance Sheets                           3
            Condensed Consolidated Statements of Operations                 4
            Condensed Consolidated Statements of Cash Flows                 5
            Notes to Condensed Consolidated Financial Statements            6

Item 2.  Management's Discussion and Analysis of Financial Condition
            and Results of Operations                                       8

Item 3.  Quantitative and Qualitative Disclosures about Market Risk         11

Part II. Other Information

Item 4.  Submission of Matters to a Vote of Security Holders                12

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

            Signatures                                                      13



<PAGE>

Part I.  Financial Information

Item 1.  Condensed Consolidated Financial Statements


                         LASER-PACIFIC MEDIA CORPORATION
                                AND SUBSIDIARIES
                      Condensed Consolidated Balance Sheets

<TABLE>
<CAPTION>

                                                                                    (Audited)          (Unaudited)
                                                                                   December 31           June 30
                                                                                      1998                1999
                                                                                 ----------------    ----------------

<S>                                                                                    <C>                 <C>
Assets

Current assets                                                                $        6,654,235  $        6,758,893
Net property and equipment                                                            13,219,739          13,876,738
Other assets                                                                             352,325             539,562

                                                                                 ----------------    ----------------
Total Assets                                                                  $       20,226,299  $       21,175,193
                                                                                 ================    ================

Liabilities and Stockholders' Equity

Current liabilities                                                           $        3,885,523  $        4,213,316
Notes payable to bank and long-term debt, less current installments                    7,628,588           7,673,037

Stockholders' equity:
   Common stock, $.0001 par value.  Authorized 25,000,000 shares; issued
   and outstanding 7,222,575 shares at December 31, 1998 and 7,519,559
   at June 30, 1999.                                                                         722                 752
Additional paid-in capital                                                            19,792,737          19,828,237
Accumulated deficit                                                                 (11,081,271)        (10,540,149)
                                                                                 ----------------    ----------------
 Net stockholders' equity                                                              8,712,188           9,288,840
                                                                                 ----------------    ----------------
Total Liabilities and Stockholders' Equity                                    $       20,226,299  $       21,175,193

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






   See accompanying notes to the condensed consolidated financial statements.




<PAGE>

                        LASER-PACIFIC MEDIA CORPORATION
                                AND SUBSIDIARIES
           Condensed Consolidated Statements of Operations (Unaudited)



<TABLE>
<CAPTION>

                                                                    Three Months Ended                    Six Months Ended
                                                                          June 30                              June 30
                                                             ----------------------------------    --------------------------------
                                                                 1998               1999               1998               1999
                                                             --------------    ----------------    --------------     -------------

<S>                                                              <C>                 <C>              <C>               <C>
Revenues                                                 $       6,576,480           5,594,118  $     14,628,331        13,535,727

Operating costs
     Direct costs                                                4,609,903           4,212,592         9,690,041         8,935,238
     Depreciation and amortization                               1,076,258             713,511         1,923,806         1,407,554
                                                             --------------    ----------------    --------------     -------------
                                                                 5,686,161           4,926,103        11,613,847        10,342,792
                                                             --------------    ----------------    --------------     -------------
      Gross profit                                                 890,319             668,015         3,014,484         3,192,935
Selling, general and administrative
    and other expenses                                           1,309,546           1,054,051         2,510,887         2,111,928
                                                             --------------    ----------------    --------------     -------------
      Income (loss) from operations                              (419,227)           (386,036)           503,597         1,081,007

Gain on sale of subsidiary, net of applicable taxes                874,578                 ---           874,578               ---
Interest expense                                                   352,431             282,730           729,753           583,014
Other Income                                                         6,242              34,353            16,036            57,829
                                                             --------------    ----------------    --------------     -------------
      Income before income taxes                                   109,162           (634,413)           664,458           555,822

Provision for (benefit from) income taxes                           54,544            (20,200)            54,544            14,700

                                                             ==============    ================    ==============     =============
      Net income (loss)                                  $          54,618           (614,213)  $        609,914           541,122
                                                             ==============    ================    ==============     =============

Net Income (loss) Per Share
       Basic Net Income                                  $            0.01              (0.08)  $           0.09              0.07
                                                             --------------    ----------------    --------------     -------------

       Diluted Net Income                                $            0.01              (0.08)  $           0.08              0.07
                                                             --------------    ----------------    --------------     -------------

Weighted average shares outstanding (basic)                      7,147,539           7,414,670         7,137,855         7,344,705
                                                             ==============    ================    ==============     =============

Weighted average shares outstanding (diluted)                    7,627,385           7,414,670         7,408,888         7,779,488
                                                             ==============    ================    ==============     =============

</TABLE>

     See accompanying notes to condensed consolidated financial statements.


<PAGE>

                         LASER-PACIFIC MEDIA CORPORATION
                                AND SUBSIDIARIES
           Condensed Consolidated Statements of Cash Flows (Unaudited)
<TABLE>
<CAPTION>

                                                                                           Six Months ended June 30
                                                                                      ------------------------------------
                                                                                           1998                 1999
                                                                                      ---------------      ---------------
<S>                                                                                          <C>                  <C>
      Cash flows from operating activities
        Net income                                                                 $         609,914   $          541,122
        Adjustments to reconcile net income to net cash
          provided by operating activities:
             Depreciation and amortization                                                 1,563,860            1,407,554
             Gain on sale of subsidiary                                                    (874,578)                  ---
             Gain on sale of property and equipment                                         (46,957)              (2,500)
             Provision for doubtful accounts receivable                                      115,742              134,678
             Other                                                                               810                   76
             Change in assets and liabilities:
                (Increase) decrease in:
                   Accounts receivable                                                     1,723,997            1,580,793
                   Inventory                                                                  27,937              (7,545)
                   Prepaid expenses and other current assets                                (28,251)               38,214
                   Other assets                                                               75,476            (187,237)
                Increase (decrease) in:
                   Accounts payable and accrued expenses                                     285,633             (12,805)
                                                                                      ===============      ===============
                       Net cash provided by operating activities                           3,453,583            3,492,350
                                                                                      ===============      ===============

      Cash flows from investing activities:
             Purchases of property and equipment                                         (1,454,204)          (2,064,553)
             Net proceeds from disposal of property and equipment                             46,957                2,500
             Net effect of sale of subsidiary                                              3,402,091                  ---
                                                                                      ---------------      ---------------
                       Net cash (used in) provided by investing activities                 1,994,844          (2,062,053)
                                                                                      ===============      ===============

      Cash flows from financing activities :
             Net (repayment) proceeds of notes payable to bank and long- term debt       (3,351,252)              385,047
             (Repayment) of notes payable to related parties                               (900,000)                  ---
             Proceeds from issuance of common stock                                            6,534               35,530
                                                                                      ===============      ===============
                       Net cash (used in) provided by financing activities               (4,244,718)              420,577
                                                                                      ===============      ===============

                       Net increase in cash                                                1,203,709            1,850,874
      Cash at beginning of period                                                            367,363            1,159,206
                                                                                      ---------------      ---------------
      Cash at end of period                                                                1,571,072            3,010,080
                                                                                      ===============      ===============

      Supplementary disclosure of cash flow information:
        Cash paid during the period for interest                                   $         729,753   $          583,014
                                                                                      ===============      ===============
</TABLE>

     See accompanying notes to condensed consolidated financial statements.




<PAGE>




                         LASER-PACIFIC MEDIA CORPORATION

                     Notes to Condensed Financial Statements
                                   (Unaudited)


(1)      Basis of Presentation

     In  the  opinion  of  management,   the  accompanying  unaudited  condensed
financial  statements  contain all adjustments  (consisting of normal  recurring
items) necessary to present fairly the financial position of Laser-Pacific Media
Corporation  ("the  Company")  and its  subsidiaries  as of June  30,  1999  and
December 31, 1998; the results of operations for the three and six month periods
ended June 30, 1998 and 1999; and the statements of cash flows for the six month
periods  ended June 30, 1998 and 1999.  Included in the  Condensed  Consolidated
Financial Statements is the activity of the Company's  consolidated  subsidiary,
Pacific Video Canada,  Ltd. ("PVC"). On May 15, 1998 the Company sold all of its
investment in PVC. Accordingly,  revenue and expense of PVC through May 15, 1998
is  included in the results of  operations  for the three and six month  periods
ended  June 30,  1998.  The  Company's  business  is  subject  to the prime time
television  industry's typical  seasonality.  Historically,  revenues and income
from  operations  have been highest during the first and fourth  quarters,  when
production  of television  programs and demand for the Company's  services is at
its  highest.  The net  income  or loss of any  interim  quarter  is  seasonally
disproportionate  to  revenues  because  selling,   general  and  administrative
expenses and certain operating  expenses remain  relatively  constant during the
year.  Therefore,  interim  results are not indicative of results to be expected
for the entire fiscal year.

     In  accordance   with  the  regulations  of  the  Securities  and  Exchange
Commission  under Rule 10-01 of Regulation  S-X, the  accompanying  consolidated
financial  statements  and  footnotes  have been  condensed  and do not  contain
certain  information  included in the Company's  annual  consolidated  financial
statements and notes thereto.

(2)       Income per Share

     Net income per basic and diluted shares are based upon the weighted average
number of common shares outstanding.  Diluted shares outstanding  represents the
total of common shares  outstanding  as well as those options and warrants where
the exercise price was below the average closing stock price,  unless considered
anti-dilutive, during the three and six month periods ended June 30 1999.

(3)         Income Taxes

     For the six  months  ended June 30,  1999,  federal  income tax  expense of
$11,000  and state  income  tax  expense  of  $3,700  was  recognized  after the
application of net operating loss carry forwards. Income tax expense for the six
months ended June 30, 1999 was computed  using the estimated  effective tax rate
to apply for all of 1999  after  considering  the impact of net  operating  loss
carry forwards.










<PAGE>



                         LASER-PACIFIC MEDIA CORPORATION

        Notes to Condensed Consolidated Financial Statements (continued)
                                   (Unaudited)

(4)      Income per Share (EPS)

     Basic EPS is  computed  as net  earnings  divided  by the  weighted-average
number of common  shares  outstanding  for the period.  Diluted EPS reflects the
potential  dilution  that  could  occur  from  common  shares  issuable  through
stock-based compensation plans including stock options, restricted stock awards,
warrants and other convertible  securities using the treasury stock method.  The
following summarizes the computation of Basic EPS and Diluted EPS:

<TABLE>
<CAPTION>

<S>                                                                 <C>              <C>              <C>               <C>
                                                                      Three Months ended                Six Months ended
                                                                      6/30/98          6/30/99          6/30/98           6/30/99



Net Income (Loss)                                             $        54,618        (614,213)  $       609,914           541,122

Shares:
Weighted Average Common Shares                                      7,147,539        7,414,670        7,137,855         7,344,705
Dilutive Stock Options and Warrants                                   479,846              ---          271,033           434,783
Dilutive Potential Common Shares                                    7,627,385        7,414,670        7,408,888         7,779,448

Earnings Per Share:
Basic                                                         $          0.01           (0.08)  $          0.09              0.07
Diluted                                                       $          0.01           (0.08)  $          0.08              0.07
</TABLE>


(5)      Sale of Pacific Video Canada Ltd.  (PVC)

     On May 15, 1998 the Company  sold all of its  investment  in PVC to Command
Post and  Transfer  Corporation.  The Company  realized  cash  consideration  of
$3,810,000 and a gain on sale of $875,000, net of applicable taxes.

     The statement of operations  of PVC  presented  below  reflects the amounts
attributable to PVC, which are included in the condensed  consolidated financial
statements of the Company,  as of the three and six month periods ended June 30,
1998.

                           PACIFIC VIDEO CANADA, Ltd.
                        Condensed Statement of Operations

<TABLE>
<CAPTION>
<S>                                                                      <C>                           <C>
                                                                         3 Months ended                 6 Months ended
                                                                         June 30, 1998                  June 30, 1998

                                                                   ---------------------------     ------------------------


          Sales                                                 $                   1,645,067  $                 2,894,972
          Direct expenses                                                           1,172,840                    2,079,822
                                                                   ---------------------------     ------------------------
                   Gross Profit                                                       472,228                      815,151

          SG&A expenses                                                               333,146                      606,257
                                                                   ---------------------------     ------------------------
                   Earnings from Operations                                           139,081                      208,893

          Interest and Other expenses                                                  36,628                       71,166
                                                                   ---------------------------     ------------------------
                   Earnings before income taxes                                       102,453                      137,727

          Income taxes                                                                 38,318                       54,544
                                                                   ===========================     ========================
                   Net earnings                                 $                      64,135  $                    83,183
                                                                   ===========================     ========================
</TABLE>
<PAGE>

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

Results of Operations

     On May 15, 1998 the Company sold all of it's  investment  in Pacific  Video
Canada Ltd. (PVC) to Command Post and Transfer Corporation. The Company realized
cash  consideration of $3,830,000 and recognized a net gain on sale of $875,000.
The  proceeds  were  used to  reduce  outstanding  debt and to  provide  working
capital.

     The condensed  consolidated  statement of operations of Laser Pacific Media
Corporation  for the three and six month  periods  ended June 30,  1998  include
amounts  attributable  to PVC and also  the  gain  recognized  on the  sale.  In
comparing the results for three and six month periods ended June 30, 1998 to the
same  periods  ended June 30,  1999  material  amounts  attributable  to PVC are
presented,  followed by a  comparison  of our U.S.  operations  for the periods,
excluding the  contribution  of PVC.  Revenues for the six months ended June 30,
1999 decreased to $13,536,000  from  $14,628,000 for the same year-ago period, a
decrease of $1,092,000 or 7.5%. Revenues from International Operations decreased
$2,895,000  as a result of the sale of our  Canadian  subsidiary  Pacific  Video
Canada  Ltd  (PVC)  on May  15,  1998.  All  of  Laser  Pacific's  International
Operations are attributable to PVC.

     Revenues  for  six  months  ended  June  30,  1999  at the  Company's  U.S.
facilities  increased  $1,803,000,  or 15.4%  versus the  year-ago  period.  The
increase  in  revenues  at  U.S.  facilities  is  comprised  of an  increase  of
$1,833,000  in  Post  Production  Services,  an  increase  of  $61,000  in  Film
Production  Services  and a  decrease  of $91,000 in  Production  Services.  The
Company's Production Services Business has declined over the last four years and
is no longer material to the Company's sales or operating profits.  The increase
in revenues at the U.S. facilities from Post Production Services is attributable
to increased  demand for the Company's  services with  significant  increases in
Digital  Compression  Services  including  Digital  Versatile, Disc Feature Film
Mastering and High  Definition  Services.  The increase in revenues from Digital
Compression  Services,  Film Mastering and High Definition  Services amounted to
$1,273,000  for the period,  an increase  of 107.3% over the  previous  year-ago
period.

     Revenues for the quarter ended June 30, 1999  decreased to $5,594,000  from
$6,576,000  for the same  year-ago  period,  a decrease  of  $982,000  or 14.9%.
Revenues from International  Operations  decreased $1,645,000 as a result of the
sale of the Company's Canadian  subsidiary Pacific Video Canada Ltd (PVC) on May
15, 1998. All of Laser Pacific's  International  Operations are  attributable to
PVC.  Revenues  for three  months  ended  June 30,  1999 at the  Company's  U.S.
facilities increased $663,000, or 13.4% versus the year-ago period. The increase
in revenues at the  Company's  U.S.  facilities  is  comprised of an increase of
$780,000 in Post Production  Services,  a decrease of $63,000 in Film Production
Services  and a decrease  of  $54,000  in  Production  Services.  The  Company's
Production  Services  Business has  declined  over the last four years and is no
longer  material to the Company's  sales or operating  profits.  The increase in
revenues at the U.S. Facilities from Post Production Services is attributable to
increased  demand for the  Company's  services  with  significant  increases  in
Digital  Compression  Services  including Digital  Versatile Disc,  Feature Film
Mastering and High  Definition  Services.  The increase in revenues from Digital
Compression  Services,  Film Mastering and High Definition  Services amounted to
$608,000 for the period an increase of 81.8% over the previous year-ago period.

     For the six months ended June 30, 1999, the Company recorded a gross profit
of $3,193,000 compared with $3,014,000 for the same year ago period, an increase
of  $179,000  or 5.9%.  The  overall  increase  in gross  profit was offset by a
decline in gross profit from International Operations which is the result of the
sale of PVC.  The gross  profit  for the six months  ended June 30,  1999 at the
Company's  U.S.  facilities  increased  $994,000  or 45.2%  versus the  year-ago
period,  while gross profit from Canada  decreased  $815,000 versus the year-ago
period.  The  increase  in gross  profit  at U.S.  facilities  is the  result of
increased sales volume,  discussed above,  offset by increased  operating costs,
explained below.

     For the quarter ended June 30, 1999 the Company  recorded a gross profit of
$668,000  compared to a gross profit of $890,000 for the same year ago period, a
decrease of $222,000 or 25.0%. The decrease in gross profit is the result of the
decline in gross profit of $472,000 from International Operations,  which is the
result of the sale of PVC.  The gross profit for the three months ended June 30,
1999 at the Company's  U.S.  facilities  increased  $250,000 or 59.8% versus the
year-ago period.  The increase in gross profit at U.S. facilities is the result
of increased sales volume, discussed above, offset by increased operating costs,
explained below.
<PAGE>

     Operating  costs for the six months  ended June 30,  1999 were  $10,343,000
versus  $11,614,000 for the year-ago  period, a decrease of $1,271,000 or 10.9%.
There was an increase in operating  costs at the  Company's  U.S.  facilities of
$809,000 or 8.5% versus the year-ago period. The increase at our U.S. facilities
was offset by a decline in  operating  costs of  $2,080,000  from  International
Operations,  which is the result of the sale PVC. The  operating  costs from the
Company's  U.S.  operations  increased  in most  categories  as a result  of the
increase in sales volume. The most significant  increase being labor costs which
increased $860,000. Higher labor costs were brought about by an increased number
of employees and more hours worked.  The additional labor costs were incurred as
a result of increased sales and the expansion of the Company's facilities. These
increases were partially offset by a reduction in depreciation expense from U.S.
Operations of $156,000. Operating costs from U.S. Operations, as a percentage of
revenues of the Company's U.S. Operations for the six months ended June 30, 1999
were 76.4% compared with 81.3% for the same year-ago period.

     Operating costs for the quarter ended June 30, 1999 were $4,926,000  versus
$5,686,000 for the year-ago period,  a decrease of $760,000 or 13.4%.  There was
an increase in operating  costs at the Company's U.S.  facilities of $413,000 or
9.2% versus the year-ago period.  The increase at the Company's U.S.  facilities
was offset by a decline in  operating  costs of  $1,173,000  from  International
Operations,  which  is the  result  of the  sale of PVC.  The  most  significant
increase in operating  costs from the Company's U.S.  operations was labor costs
which increased $361,000.  Higher labor costs were brought about by an increased
number of  employees  and more hours  worked.  The  additional  labor costs were
incurred as a result of increased  demand for services and the  expansion of our
facilities.  Operating  costs, as a percentage of revenues of the Company's U.S.
Operations  for the three  months ended June 30, 1999 were 88.1%  compared  with
91.5% for the same year-ago period.

     Depreciation  expense for the six months ended June 30, 1999 was $1,408,000
compared to $1,924,000 for the same year-ago  period,  a decrease of $516,000 or
26.8%. The depreciation  expense  reduction was primarily the result of the sale
of PVC discussed  above.  Depreciation  expense for PVC for the six months ended
June 30, 1998 was $360,000.

     Depreciation  expense  for the  quarter  ended June 30,  1999 was  $714,000
compared to $1,076,000 for the same year-ago  period,  a decrease of $362,000 or
33.7%. The depreciation  expense  reduction was primarily the result of the sale
of PVC discussed above.

     Selling,  general and  administrative (S G & A), and other expenses for the
six months ended June 30, 1999 were $2,112,000 as compared to $2,511,000  during
the same  year-ago  period,  an  decrease  of  $399,000  or 15.9%.  There was an
increase in SG&A of $207,000 at the Company's U.S. facilities while SG&A for the
Company's International  Operations decreased $606,000 as the result of the sale
of PVC discussed above.  The most  significant  increase in SG&A in the U.S. was
advertising and promotion expense,  which was partially offset by a reduction in
professional fees and insurance expense.

     SG&A and other  expenses  for the three  months  ended  June 30,  1999 were
$1,054,000 as compared to $1,310,000 during the same year-ago period, a decrease
of  $256,000  or 19.5%.  There was an  increase  in SG&A of  $77,000 at our U.S.
facilities while SG&A for our International Operations decreased $333,000 as the
result of the sale of PVC discussed  above. . The most  significant  increase in
SG&A in the U.S. was  advertising  and  promotion  expense,  which was partially
offset by a reduction of expenses in other categories.

     Interest  expense  for the six  months  ended  June 30,  1999 was  $583,000
compared to $730,000  for the same  year-ago  period,  a decrease of $147,000 or
20.1%.  The  decrease  in  interest  expense is the  result of lower  borrowing,
reduced rates in the U.S. and the elimination of PVC discussed  above.  Interest
expense decreased $73,000 in the U.S. Total U.S. debt was reduced  significantly
after May 15, 1998 with the proceeds from the sale of PVC.

     Interest expense for the quarter ended June 30, 1999 was $283,000  compared
to $352,000 for the same year-ago  period,  a decrease of $69,000 or 19.8%.  The
decrease in interest expense is the result of lower borrowing,  reduced rates in
the U.S. and the elimination of PVC discussed above.  Interest expense decreased
$32,000 in the U.S. Total U.S. debt was reduced significantly after May 15, 1998
with the proceeds from the sale of PVC.

<PAGE>




Liquidity and Capital Resources

     Improved  operating results and the sale of Pacific Video Canada had a very
positive  effect on the  liquidity  and capital  resources of the  company.  The
improved  operating results and the cash generated enabled the company to reduce
debt,  borrow at better  terms and increase  availability  under  existing  loan
agreements.

     The Company and its  subsidiaries are operating under a loan agreement with
The CIT  Group/Credit  Finance  which has been amended and extended to August 3,
2001.  The maximum  credit under the  agreement is $9 million.  The amended loan
agreement  provides for  borrowings  of up to $5.4  million  under the term loan
(limited to 100% of eligible  equipment  appraisal value) and $3.6 million under
the  revolving  loan  (limited  to 85% of  eligible  accounts  receivable).  The
outstanding  balance of the term loan was  $2,998,000  at June 30,  1999.  It is
payable in monthly  installments  of $81,000  plus  interest  at prime plus 1.0%
through  August 3, 2003.  Principal  payments are not required in June,  July or
August.  The revolving  loan bears  interest at prime plus 1.0% which is payable
monthly.  The revolving loan had an  outstanding  balance of $23,000 at June 30,
1999. The loan agreement  contains  automatic renewal  provisions for successive
terms of two years  thereafter  unless  terminated as of August 3, 2001 or as of
the end of any renewal  term by either  party by giving the other party at least
60 day written notice.

     The  Company  has  entered  into   commitments   with   various   equipment
manufacturers  and distributors to acquire  additional  equipment as a result of
the increasing  demand for the Company's  services.  The commitments made by the
Company to acquire the equipment may exceed $7,000,000 for the fiscal year ended
December 31, 1999.  Projected cash flow and available  borrowings under existing
credit arrangements are adequate to fund the purchases.

     The Company's principal source of funds is cash generated by operations. On
an  annual  basis,   the  Company   anticipates  that  existing  cash  balances,
availability  under existing loan  agreements and cash generated from operations
will be  sufficient to service  existing debt and to meet the Company's  capital
requirements for fiscal 1999. Management is of the opinion that the Company will
be able to meet its  obligations  on a timely basis.  There is no assurance that
management's plan will be achieved.


Seasonality and Variation of Quarterly Results

     The Company's business is subject to substantial  quarterly variations as a
result of seasonality,  which the Company  believes is typical of the television
post-production  industry.  Historically,  revenues  and net  income  have  been
highest during the first and fourth quarters,  when the production of television
programs  and  consequently  the demand  for the  Company's  services  is at its
highest.  Revenues  have been  substantially  lower  during the second and third
quarters, when the Company historically has incurred operating losses.


Year 2000

State of Readiness

     The  Company  is  aware of what  could be a  critical  problem  with  older
computer  systems.  The critical  problem refers to computers that designate the
year as a  two-digit  number  and thus may  recognize  the year 2000 as the year
1900.  The  Company  has  created  a task  force  to  ascertain  its  Year  2000
compliance. The task force is lead by the Senior Vice President of Engineering.

     The Company uses a wide variety of  microprocessor  based equipment,  which
runs software on numerous computer  platforms.  The Company is in the process of
determining  the  potential  impact of the century date change by  conducting an
inventory of computerized equipment and testing all of the Company's systems for
compliance.  The Company is also contacting third party vendors  regarding their
Year 2000  compliance.  Testing of internal systems is complete on approximately
90% of  both  information  technology  systems  and  non-information  technology
systems.  No  significant  Year 2000  issues  have been  revealed.  The  Company
anticipates that the remaining systems testing will be completed in 1999.
<PAGE>

Cost to Address the Company's Year 2000 Issues

     When systems are  identified  that are not Year 2000  compliant the Company
contracts with vendors to obtain updates, which will ensure compliance, and in a
limited number of instances the systems are replaced.  Some older equipment will
need to be reset after January 01, 2000 but should function properly thereafter.
The cost to remedy Year 2000  compliance  to date has not been  material  and is
being funded out of operating cash flow.  The Company  estimates that any future
remedial costs will not be material and should not exceed $100,000.

The Company's Risk

     The  failure to correct a material  Year 2000  problem  could  result in an
interruption  or failure of certain  normal  business  activities or operations.
Such failures  could  materially and adversely  affect the Company's  results of
operations, liquidity and financial condition. To date, the only conditions that
the Company has determined that may result in the Company's inability to provide
services to our clients, and consequently, a loss of revenue, would be a loss of
service to the Company by regulated public utility companies. The Company cannot
assess  the  likelihood  of  this  occurrence.  Due to the  general  uncertainty
inherent in the Year 2000 problem, resulting in part from the uncertainty of the
Year 2000-readiness of third-party suppliers, the Company is unable to determine
at this time whether the consequences of Year 2000 failures will have a material
impact on the Company's results of operations, liquidity or financial condition.
The Company  believes  its  continuing  actions  will  significantly  reduce the
Company's  level of  uncertainty  about the Year 2000 problem and in  particular
about Year 2000  Compliance.  The Company  believes that the  completion of Year
2000 testing will reduce the possibility of significant  interruptions of normal
operations.

Contingency Plans

     The Company will test new products for Year 2000 compliance.  To the extent
the Company has not been able to determine third party vendor compliance,  plans
for alternative  backup suppliers are being established and the Company plans to
acquire an additional supply of critical parts to reduce the chance of a loss of
services. The first week of January is traditionally a period of very low demand
for the  Company's  services.  The Company plans to have  appropriate  technical
staff monitor  operations on and after  January 1 and take  necessary  action to
provide  services  to our  customers.  The Company  will  continue to refine its
contingency plans throughout the remainder of 1999.



Item 3.  Quantitative and Qualitative Disclosures about Market Risk

     Derivative Instruments. The Company does not invest, and during the quarter
ended June 30, 1999 did not invest, in market risk sensitive instruments.

     Market Risk.  The Company's  market risk exposure with respect to financial
instruments is to changes in the "prime rate" in the United States.  The Company
had  borrowings  of  $2,998,000  at June 30,  1999 under a term loan  (discussed
below)  and may  borrow  up to $3.6  million  under a  revolving  loan.  Amounts
outstanding  under the term loan and revolving  credit facility bear interest at
the bank's prime rate plus 1%.


     Forward looking statements and comments in this document relating to, among
other  things,  the prospects  for the Company to achieve  growth in sales,  the
ability  to reduce  overhead,  ability to achieve  positive  operating  results,
obtain  financing and to resolve Year 2000 computer  problems,  are  necessarily
subject  to  risks  and   uncertainties.   These  risks  and  uncertainties  are
significant  in scope  and  nature,  including  risks  related  to  competition,
continuation of sales levels and in particular the risks related to the cost and
availability of capital.

<PAGE>



Part II.  Other Information


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

     At the Company's Annual Meeting of Shareholders  held on July 16, 1999, the
following  individuals  were  elected to the Board of  Directors  with each such
individual  receiving  5,816,489  votes in favor of his election to the Board of
Directors, while 4,050 votes were withheld.


                        Emory M. Cohen
                        Thomas Gordon
                        James R. Parks
                        Ronald Zimmerman


     A proposed Amendment to add 500,000 options to the Company's  Incentive and
Non-Qualified Stock Option Plan (1997) was also approved.


Item 6.  Exhibits and Reports on Form 8-K

     (a) Exhibits 10.2A Amendment Number 1 to Incentive and Non-Qualified  Stock
Option Plan (1997), dated July 19, 1999.

     (b) Reports on Form 8-K None.
























<PAGE>



                                   Signatures



                                         LASER-PACIFIC MEDIA CORPORATION

                                                   (Registrant)


     Dated: August 11, 1999      /s/James R. Parks
                                   James R. Parks
                                   Chairman of the Board
                                   and Chief Executive Officer





     Dated: August 11, 1999      /s/Robert McClain
                                    Robert McClain
                                    Secretary and
                                    Chief Financial Officer
                                   (Principal Financial and Accounting Officer)