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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 10-Q/A

AMENDMENT NO. 2

|ýQuarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934       
|-----------------------------------------------------------------------------------------
|for the quarterly period ended September 30, 2003                                        
|or                                                                                       
|oTransition Report pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
|for the transition period
from                             to                            

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Commission File Number 0-7282

COMPUTER HORIZONS CORP.(Exact name of registrant as specified in its charter)

|New York(State or other jurisdiction of
incorporation or organization)                                                        |  | 13-2638902(I.R.S. Employer
Identification Number)
|----------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------
|49 Old Bloomfield Avenue, Mountain Lakes, New Jersey 07046-1495(Address of principal executive offices)            (Zip code)
|Registrant's telephone number, including area code(973) 299-4000                                                             
|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 twelve
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.

| |  | ý
Yes |  |  |  | o
No |  | 
| |  | ----- |  |  |  | ---- |  | 

Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

| |  | ý
Yes |  |  |  | o
No |  | 
| |  | ----- |  |  |  | ---- |  | 

As
of November 11, 2003 the issuer had 30,528,278 shares of common stock outstanding.

EXPLANATORY NOTE

This Amendment No. 2 on Form 10-Q/A to our quarterly report on Form 10-Q for the quarter ended September 30,
2003 is being filed solely for the purpose of responding to comments received by us from the Staff of the Securities and Exchange Commission. This Amendment speaks as of the original filing date of
our annual report on Form 10-Q and has not been updated to reflect events occurring subsequent to the original filing date. For the convenience of the reader, we have refiled our
quarterly report on Form 10-Q in its entirety, however changes pertain only to the Management's Discussion and Analysis Section of this Form 10-Q/A.

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COMPUTER HORIZONS CORP. AND SUBSIDIARIESIndex

|Part I Financial Information |        | Page No.                                                                                                               
|---------------------------- | ------ | -----------------------------------------------------------------------------------------------------------------------
|                             | Item 1 |                                                                                                                        
|                             |        | Consolidated Statements of Operations Three and Nine Months Ended September 30, 2003 and September 30, 2002 (unaudited)
|                             |        | Consolidated Statements of Cash Flows Nine Months Ended September 30, 2003 and September 30, 2002 (unaudited)          
|                             |        | Notes to Consolidated Financial Statements                                                                             
|                             | Item 2 |                                                                                                                        
|                             | Item 4 |                                                                                                                        
|Part II                      |        | Other Information                                                                                                      
|                             | Item 1 |                                                                                                                        
|                             | Item 6 |                                                                                                                        
|                             |        | Signatures                                                                                                             

1

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COMPUTER HORIZONS CORP. AND SUBSIDIARIES  CONSOLIDATED BALANCE SHEETS  (dollars in thousands, except per share data)

|                                                                                                                                       |                                                                                                                                            | September 30, 2003         |         | December 31, 2002 |        
|-------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------- | ------- | ----------------- | -------
|
|ASSETS                                                                                                                                 |                                                                                                                                            |                            |         |                   |        
|CURRENT ASSETS:                                                                                                                        |                                                                                                                                            |                            |         |                   |        
|                                                                                                                                       | Cash and cash equivalents                                                                                                                  |                            | $       | 50,748            |        
|                                                                                                                                       | Accounts receivable, net of allowance for doubtful accounts of $8,207 and $7,696 at September 30, 2003 and December 31, 2002, respectively |                            |         | 52,506            |        
|                                                                                                                                       | Deferred income taxes                                                                                                                      |                            |         | 5,167             |        
|                                                                                                                                       | Refundable income taxes                                                                                                                    |                            |         |                  |        
|                                                                                                                                       | Other                                                                                                                                      |                            |         | 5,557             |        
|                                                                                                                                       |                                                                                                                                            |                            |         |                   |        
|                                                                                                                                       |                                                                                                                                            | TOTAL CURRENT ASSETS       |         |                   | 113,978
|                                                                                                                                       |                                                                                                                                            |                            |         |                   |        
|PROPERTY AND EQUIPMENT                                                                                                                 |                                                                                                                                            |                            | 41,476  |                   |        
|                                                                                                                                       | Less accumulated depreciation                                                                                                              |                            |         | (31,357           | )      
|                                                                                                                                       |                                                                                                                                            |                            |         |                   |        
|                                                                                                                                       |                                                                                                                                            |                            | 10,119  |                   |        
|                                                                                                                                       |                                                                                                                                            |                            |         |                   |        
|OTHER ASSETS - NET:                                                                                                                    |                                                                                                                                            |                            |         |                   |        
|                                                                                                                                       | Goodwill (Note 3)                                                                                                                          |                            |         | 33,551            |        
|                                                                                                                                       | Intangibles (Note 3)                                                                                                                       |                            |         | 2,966             |        
|                                                                                                                                       | Deferred income taxes                                                                                                                      |                            |         | 12,361            |        
|                                                                                                                                       | Other                                                                                                                                      |                            |         | 11,267            |        
|                                                                                                                                       |                                                                                                                                            |                            |         |                   |        
|                                                                                                                                       |                                                                                                                                            | TOTAL OTHER ASSETS         |         |                   | 60,145 
|                                                                                                                                       |                                                                                                                                            |                            |         |                   |        
|TOTAL ASSETS                                                                                                                           |                                                                                                                                            | $                          | 184,242 |                   | $      
|                                                                                                                                       |                                                                                                                                            |                            |         |                   |        
|LIABILITIES AND SHAREHOLDERS' EQUITY                                                                                                   |                                                                                                                                            |                            |         |                   |        
|CURRENT LIABILITIES:                                                                                                                   |                                                                                                                                            |                            |         |                   |        
|                                                                                                                                       | Accounts payable                                                                                                                           |                            | $       | 10,836            |        
|                                                                                                                                       | Accrued payroll, payroll taxes and benefits                                                                                                |                            |         | 3,636             |        
|                                                                                                                                       | Restructuring reserve                                                                                                                      |                            |         | 3,028             |        
|                                                                                                                                       | Income taxes payable                                                                                                                       |                            |         | 1,144             |        
|                                                                                                                                       | Tax benefit reserve                                                                                                                        |                            |         | 19,600            |        
|                                                                                                                                       | Other accrued expenses                                                                                                                     |                            |         | 5,932             |        
|                                                                                                                                       |                                                                                                                                            |                            |         |                   |        
|                                                                                                                                       |                                                                                                                                            | TOTAL CURRENT LIABILITIES  |         |                   | 44,176 
|                                                                                                                                       |                                                                                                                                            |                            |         |                   |        
|OTHER LIABILITIES                                                                                                                      |                                                                                                                                            |                            | 6,488   |                   |        
|                                                                                                                                       |                                                                                                                                            |                            |         |                   |        
|SHAREHOLDERS' EQUITY:                                                                                                                  |                                                                                                                                            |                            |         |                   |        
|                                                                                                                                       | Preferred stock, $.10 par; authorized and unissued 200,000 shares, including 50,000 Series A                                               |                            |         |                   |        
|                                                                                                                                       | Common stock, $.10 par, authorized 100,000,000 shares; issued 33,153,107 shares at September 30, 2003 and December 31, 2002 respectively   |                            |         | 3,315             |        
|                                                                                                                                       | Additional paid-in capital                                                                                                                 |                            |         | 133,162           |        
|                                                                                                                                       | Accumulated comprehensive loss                                                                                                             |                            |         | (3,324            | )      
|                                                                                                                                       | Retained earnings                                                                                                                          |                            |         | 14,996            |        
|                                                                                                                                       |                                                                                                                                            |                            |         |                   |        
|                                                                                                                                       |                                                                                                                                            |                            | 148,149 |                   |        
|                                                                                                                                       |                                                                                                                                            |                            |         |                   |        
|Less shares held in treasury, at cost; 2,586,344 shares and 2,660,667 shares at September 30, 2003 and December 31, 2002, respectively |                                                                                                                                            |                            | (14,571 | )                 |        
|                                                                                                                                       |                                                                                                                                            |                            |         |                   |        
|                                                                                                                                       |                                                                                                                                            | TOTAL SHAREHOLDERS' EQUITY |         |                   | 133,578
|                                                                                                                                       |                                                                                                                                            |                            |         |                   |        
|TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                                                                             |                                                                                                                                            | $                          | 184,242 |                   | $      
|                                                                                                                                       |                                                                                                                                            |                            |         |                   |        

2

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COMPUTER HORIZONS CORP. AND SUBSIDIARIES  CONSOLIDATED STATEMENTS OF OPERATIONS  (Unaudited)  (dollars in thousands, except per share data)

|                                                                                                    |                                     | THREE MONTHS ENDED |        | NINE MONTHS ENDED |      
|--------------------------------------------------------------------------------------------------- | ----------------------------------- | ------------------ | ------ | ----------------- | -----
|
|
|REVENUES:                                                                                           |                                     |                    |        |                   |      
|                                                                                                    | IT Services                         |                    | $      | 32,235            |      
|                                                                                                    | Solutions Group                     |                    |        | 27,016            |      
|                                                                                                    | Chimes                              |                    |        | 5,208             |      
|                                                                                                    |                                     |                    |        |                   |      
|                                                                                                    |                                     |                    | 64,459 |                   | 100.0
|                                                                                                    |                                     |                    |        |                   |      
|COSTS AND EXPENSES:                                                                                 |                                     |                    |        |                   |      
|                                                                                                    | Direct costs                        |                    |        | 44,406            |      
|                                                                                                    | Selling, general and administrative |                    |        | 20,494            |      
|                                                                                                    | Bad Debt Expense                    |                    |        | 389               |      
|                                                                                                    | Restructuring charge (Note 6)       |                    |        | 787               |      
|                                                                                                    | Special charges (Note 13)           |                    |        | 800               |      
|                                                                                                    | Amortization of Intangibles         |                    |        | 526               |      
|                                                                                                    |                                     |                    |        |                   |      
|                                                                                                    |                                     |                    | 67,402 |                   | 104.5
|                                                                                                    |                                     |                    |        |                   |      
|LOSS FROM OPERATIONS                                                                                |                                     |                    | (2,943 | )                 | -4.5 
|                                                                                                    |                                     |                    |        |                   |      
|OTHER INCOME / (EXPENSE):                                                                           |                                     |                    |        |                   |      
|                                                                                                    | Gain/(loss) on sale of assets       |                    |        |                  |      
|                                                                                                    | Loss on investments                 |                    |        |                  |      
|                                                                                                    | Interest income                     |                    |        | 96                |      
|                                                                                                    | Interest expense                    |                    |        | (18               | )    
|                                                                                                    |                                     |                    |        |                   |      
|                                                                                                    |                                     |                    | 78     |                   | 0.1  
|                                                                                                    |                                     |                    |        |                   |      
|LOSS BEFORE INCOME TAXES, CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE AND MINORITY INTEREST |                                     |                    | (2,865 | )                 | -4.4 
|                                                                                                    |                                     |                    |        |                   |      
|INCOME TAXES/(BENEFIT):                                                                             |                                     |                    |        |                   |      
|                                                                                                    | Current                             |                    |        | 298               |      
|                                                                                                    | Deferred                            |                    |        | (692              | )    
|                                                                                                    |                                     |                    |        |                   |      
|                                                                                                    |                                     |                    | (394   | )                 | -0.6 
|                                                                                                    |                                     |                    |        |                   |      
|LOSS BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE AND MINORITY INTEREST               |                                     |                    | (2,471 | )                 | -3.8 
|Minority Interest                                                                                   |                                     |                    | 21     |                   | 0.0  
|Cumulative effect of change in accounting principle (Note 3)                                        |                                     |                    |       |                   | 0.0  
|                                                                                                    |                                     |                    |        |                   |      
|NET LOSS                                                                                            |                                     | $                  | (2,450 | )                 | -3.8 
|                                                                                                    |                                     |                    |        |                   |      
|LOSS PER SHARE (BASIC & DILUTED):                                                                   |                                     |                    |        |                   |      
|Before Cumulative Effect of Change in Accounting Principle and Minority Interest                    |                                     | $                  | (0.08  | )                 |      
|                                                                                                    |                                     |                    |        |                   |      
|Cumulative Effect of Change in Accounting Principle                                                 |                                     | $                  |       |                   |      
|                                                                                                    |                                     |                    |        |                   |      
|Net Loss                                                                                            |                                     | $                  | (0.08  | )                 |      
|                                                                                                    |                                     |                    |        |                   |      
|WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:                                                      |                                     |                    |        |                   |      
|                                                                                                    | Basic & Diluted                     |                    |        | 30,548,000        |      
|                                                                                                    |                                     |                    |        |                   |      

3

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COMPUTER HORIZONS CORP. AND SUBSIDIARIES  CONSOLIDATED STATEMENTS OF CASH FLOWS  (Unaudited)  (dollars in thousands)

|                                                                                |                         | Nine Months Ended                                 |                                                       
|------------------------------------------------------------------------------- | ----------------------- | ------------------------------------------------- | ------------------------------------------------------
|
|CASH FLOWS FROM OPERATING ACTIVITIES                                            |                         |                                                   |                                                       
|Net loss                                                                        |                         | $                                                 | (13,259                                               
|                                                                                |                         |                                                   |                                                       
|Adjustments to reconcile net loss to net cash provided by operating activities: |                         |                                                   |                                                       
|                                                                                |                         |                                                   | Deferred taxes                                        
|                                                                                |                         |                                                   | Depreciation                                          
|                                                                                |                         |                                                   | Amortization of intangibles                           
|                                                                                |                         |                                                   | Provision for bad debts                               
|                                                                                |                         |                                                   | Loss/(Gain) on sale of assets                         
|                                                                                |                         |                                                   | Write off of goodwill                                 
|                                                                                |                         |                                                   | Change in assets and liabilities, net of acquisitions:
|                                                                                |                         |                                                   |                                                       
|                                                                                |                         |                                                   |                                                       
|                                                                                |                         |                                                   |                                                       
|                                                                                |                         |                                                   |                                                       
|                                                                                |                         |                                                   |                                                       
|                                                                                |                         |                                                   |                                                       
|                                                                                |                         |                                                   |                                                       
|                                                                                |                         |                                                   |                                                       
|                                                                                |                         |                                                   |                                                       
|                                                                                |                         |                                                   |                                                       
|                                                                                |                         |                                                   |                                                       
|NET CASH PROVIDED BY OPERATING ACTIVITIES                                       |                         |                                                   | 17,922                                                
|                                                                                |                         |                                                   |                                                       
|CASH FLOWS FROM INVESTING ACTIVITIES                                            |                         |                                                   |                                                       
|                                                                                |                         |                                                   | Purchases of furniture and equipment                  
|                                                                                |                         |                                                   | Acquisitions, net of cash                             
|                                                                                |                         |                                                   | Proceeds received from the sale of assets             
|                                                                                |                         |                                                   | Acquisition of intangibles                            
|                                                                                |                         |                                                   | Acquisition of goodwill                               
|                                                                                |                         |                                                   |                                                       
|NET CASH PROVIDED BY / (USED IN) INVESTING ACTIVITIES                           |                         |                                                   | (24,668                                               
|                                                                                |                         |                                                   |                                                       
|CASH FLOWS FROM FINANCING ACTIVITIES                                            |                         |                                                   |                                                       
|                                                                                |                         |                                                   | Payment of notes payable                              
|                                                                                |                         |                                                   | Notes payable - banks, net                            
|                                                                                |                         |                                                   | Stock options exercised                               
|                                                                                |                         |                                                   | Purchase of treasury shares                           
|                                                                                |                         |                                                   | Stock issued on employee stock purchase plan          
|                                                                                |                         |                                                   |                                                       
|NET CASH USED IN FINANCING ACTIVITIES                                           |                         |                                                   | (2,636                                                
|                                                                                |                         |                                                   |                                                       
|                                                                                |                         |                                                   | Foreign currency losses                               
|                                                                                |                         |                                                   |                                                       
|NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS                            |                         |                                                   | (9,021                                                
|CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                  |                         |                                                   | 59,769                                                
|                                                                                |                         |                                                   |                                                       
|CASH AND CASH EQUIVALENTS AT END OF PERIOD                                      |                         | $                                                 | 50,748                                                
|                                                                                |                         |                                                   |                                                       
|Supplemental disclosure of cash flow information:                               |                         |                                                   |                                                       
|                                                                                | Details of acquisition: |                                                   |                                                       
|                                                                                |                         | Tangible assets acquired (including cash of $347) |                                                       
|                                                                                |                         | Liabilities assumed                               |                                                       
|                                                                                |                         | Goodwill                                          |                                                       
|                                                                                |                         | Intangibles                                       |                                                       
|                                                                                |                         |                                                   |                                                       
|                                                                                |                         | Cash paid                                         |                                                       
|                                                                                |                         | Less: Cash received in acquisition                |                                                       
|                                                                                |                         |                                                   |                                                       
|                                                                                | Net cash paid*          |                                                   | $                                                     
|                                                                                |                         |                                                   |                                                       

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4

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COMPUTER HORIZONS CORP.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTSFor the Periods September 30, 2003 and September 30, 2002  (unaudited)

1.     Basis of Presentation

The
consolidated balance sheet as of September 30, 2003, the consolidated statements of operations for the three and nine months ended September 30, 2003 and September 30, 2002,
respectively and the statement of cash flows for the nine months ended September 30, 2003 and 2002 have been prepared by the Company without audit. In the opinion of management, all adjustments
(which include normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at September 30, 2003 (and for all periods presented) have
been made.

Certain
information and note disclosures, normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, which are not
required for interim purposes, have been condensed or omitted. It is suggested that these consolidated financial statements be read in conjunction with the financial statements and notes thereto
included in the Annual Report on Form 10-K for the year ended December 31, 2002 filed by the Company. The results of operations for the periods ended September 30,
2003 and 2002 are not necessarily indicative of the operating results for the respective full years.

Reclassifications

Certain
reclassifications have been made to the 2002 comparative financial statements to conform to the 2003 presentation.

2.     Recent Accounting Pronouncements

In
June 2001, the Financial Accounting Standards Board approved the issuance of SFAS No. 141, "Business Combinations" and in July 2001, SFAS 142, "Goodwill and Other
Intangible Assets." The new standards require that all business combinations initiated after June 30, 2001 must be accounted for under the purchase method. In addition, all intangible assets
acquired that are obtained through contractual or legal right, or are capable of being separately sold, transferred, licensed, rented or exchanged shall be recognized as an asset apart from goodwill.
Goodwill and intangibles with indefinite lives will no longer be subject to amortization, but will be subject to at least an annual assessment for impairment by applying a fair value based test. The
Company adopted SFAS 142 as of January 1, 2002 and in compliance with this new regulation has discontinued the amortization of goodwill. For the effect of this statement on the Company
see Note 3.

In
November 2002, the EITF reached a consensus on Issue No. 00-21, "Accounting for Revenue Arrangements with Multiple Deliverables." This Issue provides guidance on when and
how to separate elements of an arrangement that may involve the delivery or performance of multiple products, services and rights to use assets into separate units of accounting. The guidance in the
consensus is effective for revenue arrangements entered into in fiscal periods ending after December 15, 2003. The transition provision allows either prospective application or a cumulative
effect adjustment upon adoption. The effect of the adoption of this statement was immaterial to the Company.

In
December 2002, the Financial Accounting Standards Board approved the issuance of SFAS No. 148, "Accounting for Stock-Based CompensationTranslation and Disclosure." This
statement amends FASB Statement No. 123, "Accounting for Stock-Based Compensation," to provide alternative methods of transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition, this Statement amended the disclosure requirements of Statement

5

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123
to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the methods used on reported
results. The Company adopted the disclosure provisions as of December 31, 2002.

The
exercise price per share on all options granted may not be less than the fair value at the date of the option grant. The Company applies Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees," as modified by FIN 44, "Accounting for Certain Transactions Involving
Stock Compensation," in accounting for stock-based employee compensation, whereby no compensation cost had been recognized for the plans. The Company expects to continue following the guidance under
APB 25 for stock based compensation to employees. Had compensation cost for the plans been determined based on the fair value of the options at the grant dates and been consistent with the method of
SFAS No. 123, the Company's net loss and loss per share would have been increased to the pro forma amounts indicated below:

|                   |  |                                                                                                                                             |  | Three Months Ended |        | Nine Months Ended |  
|------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | ------ | ----------------- | -
|
|Net loss           |  | As reported                                                                                                                                 |  | $                  | (2,450 | )                 | $
|                   |  | Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects |  |                    | (438   | )                 |  
|                   |  |                                                                                                                                             |  |                    |        |                   |  
|                   |  | Pro forma                                                                                                                                   |  | $                  | (2,888 | )                 | $
|                   |  |                                                                                                                                             |  |                    |        |                   |  
|Earnings per share |  |                                                                                                                                             |  |                    |        |                   |  
|Basic              |  | As reported                                                                                                                                 |  | $                  | (0.08  | )                 | $
|                   |  | Pro forma                                                                                                                                   |  |                    | (0.09  | )                 |  
|Diluted            |  | As reported                                                                                                                                 |  | $                  | (0.08  | )                 | $
|                   |  | Pro forma                                                                                                                                   |  |                    | (0.09  | )                 |  

Effective
on January 1, 2003 the Company adopted Financial Accounting Standards Board No. 146, "Accounting for Exit or Disposal Activities," ("SFAS 146"), which supersedes
Emerging Issues Task Force Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in
a Restructuring)." The new standards require that a liability for a cost associated with an exit or disposal activity, including costs related to terminating a contract that is not a capital lease and
the termination benefits that employees who are involuntarily terminated receive under the terms of a one-time benefit arrangement that is not ongoing or an individual
deferred-compensation contract, be recognized when the liability is incurred. Previously, under Issue No. 94-3, a liability for an exit cost was recognized at the date of an
entity's commitment to an exit plan, which may not necessarily meet the definition of a liability. SFAS 146 is effective for exit or disposal activities of the Company that are initiated after
December 31, 2002. The Company adopted SFAS 146 as of January 1, 2003 (See Note 6).

In
May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." It establishes classification and
measurement standards for three types of freestanding financial instruments that have characteristics of both liabilities and equity. Instruments within the scope of SFAS 150 must be classified
as liabilities within the Company's financial statements. The provisions of SFAS No. 150 are effective for (1) instruments entered into or

6

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modified
after May 31, 2003 and (2) pre-existing instruments as of July 1, 2003. SFAS 150 is not expected to have a material effect on the Company's financial
statements.

In
January 2003, the FASB issued Financial Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46"), which addresses consolidation by business enterprises of
variable interest entities (VIEs). The accounting provisions and disclosure requirements of FIN 46 are effective immediately for VIEs created after January 31, 2003, and are effective for
reporting periods ending after December 15, 2003, for VIEs created prior to February 1, 2003. Although the Company is still evaluating the impact of FIN 46, it is not expected to have a
material effect on the Company's financial statements.

3.     Adoption of FAS 142



Gross
Carrying
Amount

Accumulated
Amortization

Net Carrying
AmountAmortized intangible assets:Non-compete agreements

$
250

$
9

$
241RGII Trademark


150


37


113RGII software


726


37


689Customer contracts


1,800


427


1,373Xpress software


566


16


550Total

$
3,492

$
526

$
2,966




2003 (remaining period)

$
5582004


7552005


6802006


6132007


201thereafter


159Total

$
2,966




7

---



Reporting Units

Solutions

IT Services

Education

Chimes

Consolidated(in 000's)Balance as of December 31, 2002

$
19,203

$


$


$


$
19,203Additions to goodwill*


14,348











14,348Balance as of September 30, 2003

$
33,551

$


$


$


$
33,551


---





8

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Three Months Ended

Nine Months EndedSeptember 30,
2003

September 30,
2002

September 30,
2003

September 30,
2002Reported Net Loss

$
(2,450
)
$
(918
)
$
(13,259
)
$
(32,968
)Cumulative Effect of Change in Accounting Principle











29,861Adjusted Net Loss

$
(2,450
)
$
(918
)
$
(13,259
)
$
(3,107
)Reported Loss per Share:Basic & Diluted

$
(0.08
)
$
(0.03
)
$
(0.44
)
$
(1.05
)Adjustment for Cumulative Effect of Change in Accounting Principle:Basic & Diluted











0.95Adjusted Loss per Share:Basic & Diluted

$
(0.08
)
$
(0.03
)
$
(0.44
)
$
(0.10
)


4.     Earnings Per Share

The
computation of diluted earnings per share excludes options with exercise prices greater than the average market price. As of September 30, 2003, there were 275,138 and 285,263 excluded
options, respectively, for the third quarter and the first nine months ended September 30, 2003, with exercise prices between $4.40 and $26.63 and $4.00 and $26.63, respectively, per share.
There were 3,096,126 and 5,743,813 excluded options, respectively, for the third quarter and the first nine months ended September 30, 2002, outstanding at September 30, 2002 with
exercise prices between $4.40 and $26.63 and $2.02 and $26.63, respectively, per share.

5.     Segment Information

The
Company has identified three business segments: IT Services, the Solutions Group and Chimes, Inc. The IT Services division provides highly skilled software professionals to augment the
internal information management staffs of major corporations. IT Services is primarily staffing augmentation. The Solutions division provides enterprise application services, e-business
solutions, customized Web development and Web enablement of strategic applications, Customer Relationship Management (CRM), network services, strategic outsourcing and managed resourcing as well as
software and relational database products, up to the time of sale, March 25, 2002, of Princeton Softech Inc. In the segment information chart below, amounts pertaining to Princeton
Softech Inc. for the nine months ended September 30, 2002, are included and total: revenues of $2.9 million, gross profit of $2.4 million and an operating loss of
$1.9 million. Chimes, Inc., a wholly-owned subsidiary of CHC, provides workforce procurement and management services to Global 2000 companies, which, according to Forbes magazine,
represent the biggest and most important companies, as measured by sales, profits, assets and market value. Loss before income tax benefit consists of loss before income taxes, excluding interest
income, interest expense, gain/(loss) on the sale of assets, restructuring charges, special charges, the write-off of a terminated project, minority interest, amortization of intangibles,
and

9

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net
loss on investments. These exclusions total expense of $2.0 million and income of $247,000 for the quarter ended September 30, 2003 and 2002, respectively and expense of
$15.3 million and income of $4.1 million for the first nine months ended September 30, 2003 and 2002, respectively (see reconciliation of segments operating loss to consolidated
loss before income taxes). Corporate services, consisting of general and administrative services are provided to the segments from a centralized location. Such costs are allocated to the applicable
segments based on revenue.

|                                         |                     | Three Months Ended |        | Nine Months Ended |  
|---------------------------------------- | ------------------- | ------------------ | ------ | ----------------- | -
|
|Revenue:                                 |                     |                    |        |                   |  
|                                         | IT Services         |                    | $      | 32,235            |  
|                                         | Solutions Group     |                    |        | 27,016            |  
|                                         | Chimes              |                    |        | 5,208             |  
|                                         |                     |                    |        |                   |  
|TOTAL                                    |                     | $                  | 64,459 |                   | $
|                                         |                     |                    |        |                   |  
|Gross Margin:                            |                     |                    |        |                   |  
|                                         | IT Services         |                    | $      | 6,514             |  
|                                         | Solutions Group     |                    |        | 8,657             |  
|                                         | Chimes              |                    |        | 4,882             |  
|                                         |                     |                    |        |                   |  
|TOTAL                                    |                     | $                  | 20,053 |                   | $
|                                         |                     |                    |        |                   |  
|Operating income / (loss):               |                     |                    |        |                   |  
|                                         | IT Services         |                    | $      | 1,975             |  
|                                         | Solutions Group     |                    |        | 2,807             |  
|                                         | Chimes              |                    |        | (113              | )
|                                         |                     |                    |        |                   |  
|TOTAL                                    |                     | $                  | 4,669  |                   | $
|                                         |                     |                    |        |                   |  
|Corporate Allocation:                    |                     |                    |        |                   |  
|                                         | IT Services         |                    | $      | 3,213             |  
|                                         | Solutions Group     |                    |        | 1,767             |  
|                                         | Chimes              |                    |        | 519               |  
|                                         |                     |                    |        |                   |  
|TOTAL                                    |                     | $                  | 5,499  |                   | $
|                                         |                     |                    |        |                   |  
|Income/(loss) before income tax benefit: |                     |                    |        |                   |  
|                                         | IT Services         |                    | $      | (1,238            | )
|                                         | Solutions Group     |                    |        | 1,040             |  
|                                         | Chimes              |                    |        | (632              | )
|                                         |                     |                    |        |                   |  
|TOTAL                                    |                     | $                  | (830   | )                 | $
|                                         |                     |                    |        |                   |  
|Assets:                                  |                     |                    |        |                   |  
|                                         | IT Services         |                    |        |                   |  
|                                         | Solutions Group     |                    |        |                   |  
|                                         | Chimes              |                    |        |                   |  
|                                         | Corporate and other |                    |        |                   |  
|                                         |                     |                    |        |                   |  
|TOTAL                                    |                     |                    |        |                   |  
|                                         |                     |                    |        |                   |  

10

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Reconciliation of Segment Loss before Income Tax Benefit to Consolidated Loss Before Income Tax Benefit:

|                                                                                                                 |                                 | Three Months Ended |        | Nine Months Ended |  
|---------------------------------------------------------------------------------------------------------------- | ------------------------------- | ------------------ | ------ | ----------------- | -
|
|Total Segments Loss before Income Tax Benefit                                                                    |                                 | $                  | (830   | )                 | $
|                                                                                                                 |                                 |                    |        |                   |  
|Adjustments:                                                                                                     |                                 |                    |        |                   |  
|Interest income, net                                                                                             |                                 |                    | 78     |                   |  
|                                                                                                                 | Gain/(loss) on sale of assets   |                    |        |                  |  
|                                                                                                                 | Restructuring charges           |                    |        | (787              | )
|                                                                                                                 | Amortization of intangibles     |                    |        | (526              | )
|                                                                                                                 | Special charges                 |                    |        | (800              | )
|                                                                                                                 | Write-off of terminated project |                    |        |                  |  
|                                                                                                                 | Net loss on investments         |                    |        |                  |  
|Total Adjustments:                                                                                               |                                 | $                  | (2,035 | )                 | $
|                                                                                                                 |                                 |                    |        |                   |  
|Consolidated loss before income taxes, cumulative effect of change in accounting principle and minority interest |                                 | $                  | (2,865 | )                 | $
|                                                                                                                 |                                 |                    |        |                   |  

6.     Restructuring Charges

During
the third quarter of 2003, the Company recorded a restructuring charge of approximately $787,000 relating to the closing of Chimes (UK) Ltd. and severance charges related to US
operations. The Company decided to continue business in this geographic area via a third party and therefore recorded the charge after the building was closed. The provision includes an accrual
relating to the
future costs associated with continuing rent on this property in the United Kingdom. The closing of this office resulted in a severance charge of $247,000. As of September 30, 2003, $203,000
had been paid in severance to terminated employees.

|                        |                | Recorded |     | Paid |     | Remaining at
September 30,
2003
|----------------------- | -------------- | -------- | --- | ---- | --- | -------------------------------
|Severance:              |                |          |     |      |     |                                
|                        | United Kingdom |          | $   | 247  |     | $                              
|                        | United States  |          |     | 219  |     |                                
|                        |                |          |     |      |     |                                
|Total Severance         |                | $        | 466 |      | $   | (422                           
|                        |                |          |     |      |     |                                
|Lease Obligations:      |                |          |     |      |     |                                
|                        |                |          |     |      |     |                                
|                        | United Kingdom |          | $   | 149  |     | $                              
|                        |                |          |     |      |     |                                
|General Office Closure: |                |          |     |      |     |                                
|                        |                |          |     |      |     |                                
|                        | United Kingdom |          | $   | 172  |     | $                              
|                        |                |          |     |      |     |                                
|                        |                | Total    |     | $    | 787 |                                
|                        |                |          |     |      |     |                                

During
the second quarter of 2003, the Company evaluated the geographic area in Canada and decided to close facilities and go virtual in the smaller Canadian markets. After the buildings were entirely
closed, the Company recorded a restructuring charge of approximately $1.9 million relating to the consolidating and closing of these facilities in the Canadian subsidiary. This
$1.9 million expense was calculated based on current rent commitments less a calculated sublease amount based on current market conditions. The provision included an accrual relating to the
future costs associated with

11

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continuing
rent on six properties, five of which are in Canada, with rents continuing through 2004, 2006 and 2007. The closing of these offices resulted in the termination of 20 employees with a
severance charge of $697,000. As of September 30, 2003, $524,000 had been paid in severance to the terminated employees.

|                        |                | Recorded                |   | Paid  |       | Remaining at
September 30,
2003
|----------------------- | -------------- | ----------------------- | - | ----- | ----- | -------------------------------
|Lease Obligations:      |                |                         |   |       |       |                                
|                        | Canada         |                         | $ | 1,100 |       | $                              
|                        | United States  |                         |   | 36    |       |                                
|                        |                |                         |   |       |       |                                
|                        |                | Total Lease Obligations |   | $     | 1,136 |                                
|                        |                |                         |   |       |       |                                
|Severance:              |                |                         |   |       |       |                                
|                        | Canada         |                         | $ | 358   |       | $                              
|                        | United States  |                         |   | 197   |       |                                
|                        | United Kingdom |                         |   | 142   |       |                                
|                        |                |                         |   |       |       |                                
|                        |                | Total Severance         |   | $     | 697   |                                
|                        |                |                         |   |       |       |                                
|General Office Closure: |                |                         |   |       |       |                                
|                        |                |                         |   |       |       |                                
|                        | Canada         |                         | $ | 116   |       | $                              
|                        |                |                         |   |       |       |                                
|                        |                | Total                   |   | $     | 1,949 |                                
|                        |                |                         |   |       |       |                                

During
the fourth quarter of 2002, the Company recorded a restructuring charge of $2.8 million pertaining to 2002 office closings. During the second quarter of 2003, half of the rent for one
office closing was reversed after the rent was negotiated at a lower rate for half the building.

|                   |               | Remaining at
December 31,
2002 |   | Paid  |  | Reversed |        | Remaining at
September 30,
2003
|------------------ | ------------- | ------------------------------ | - | ----- |  | -------- | ------ | -------------------------------
|Lease Obligations: |               |                                |   |       |  |          |        |                                
|                   | United States |                                | $ | 2,483 |  | $        | (1,023 | )                              
|                   |               |                                |   |       |  |          |        |                                

At
the end of 2002, the Company had $295,000 of five lease obligations remaining from the restructure expense recorded in 2001. Of the five lease obligations, four remain and the balance as of
September 30, 2003 was $141,000.

|                   |               | Remaining at
Dec. 31, 2002 |   | Paid |     | Remaining at
September 30, 2003
|------------------ | ------------- | -------------------------- | - | ---- | --- | -------------------------------
|Severance:         |               |                            |   |      |     |                                
|                   | United States |                            | $ | 1    |     | $                              
|                   |               |                            |   |      |     |                                
|Lease Obligations: |               |                            |   |      |     |                                
|                   |               |                            |   |      |     |                                
|                   | United States |                            | $ | 294  |     | $                              
|                   |               |                            |   |      |     |                                
|                   |               | Total                      |   | $    | 295 |                                
|                   |               |                            |   |      |     |                                

12

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At the end of 2002 the Company had $488,000 of one lease obligation remaining on the restructure expense recorded in 2000 with the lease terminating in 2005. The balance remaining at
September 30, 2003 was $355,000.

|                   |               | Remaining at
Dec. 31, 2002 |   | Paid |  | Remaining at
September 30, 2003
|------------------ | ------------- | -------------------------- | - | ---- |  | -------------------------------
|Lease Obligations: |               |                            |   |      |  |                                
|                   | United States |                            | $ | 488  |  | $                              
|                   |               |                            |   |      |  |                                

7.     Comprehensive Income / (Loss)

Statement
of Financial Accounting Standards No. 130, Reporting Comprehensive Income ("SFAS No.130"), requires that items defined as other comprehensive income/(loss), such as foreign currency
translation adjustments, be separately classified in the financial statements and that the accumulated balance of other comprehensive income/(loss) be reported separately from retained earnings and
additional paid-in capital in the equity section of the balance sheet. The components of comprehensive loss for the three and nine months ended September 30, 2003 and
September 30, 2002 are as follows:

|                                                                |  | Three Months Ended |        | Nine Months Ended |  
|--------------------------------------------------------------- |  | ------------------ | ------ | ----------------- | -
|
|Comprehensive Loss:                                             |  |                    |        |                   |  
|Net Loss                                                        |  | $                  | (2,450 | )                 | $
|Other comprehensive income/(loss) - Foreign currency adjustment |  |                    | 240    |                   |  
|Unrealized gain/(loss) on SERP investments                      |  |                    | (112   | )                 |  
|                                                                |  |                    |        |                   |  
|Comprehensive Loss                                              |  | $                  | (2,322 | )                 | $
|                                                                |  |                    |        |                   |  

8.     Acquisitions

On
September 12, 2003, the Company acquired, from Commerce One, the Xpress solution, a suite of software and services designed to rapidly facilitate product data synchronization between trading
partners. The purchase price of the software was $566,000, recorded as intangible assets, and is being amortized over a three year period.

On
July 8, 2003, the Company acquired all of the stock of privately-held RGII Technologies, Inc. ("RGII"). The Company purchased RGII because acquiring a platform company in
the Federal government IT Services marketplace has been a long-term priority for the Company. The purchase price was approximately $22.1 million including an up-front
cash payment, acquisition expenses, working capital adjustment and the payoff of a note payable of $1.5 million. In addition the Company paid off a RGII $665,000 note and line of credit of
approximately $2 million. In addition, the seller may be entitled to contingent payments based on RGII's performance against profitability objectives over the next three years. The contingent
payments are evidenced by a contingent note with a face value of $10 million that is payable over three years, only if certain financial performance objectives are met. These financial
performance objectives are based on earnings before interest and taxes ("EBIT") targets totaling $19.8 million over a three-year period. There are no minimum or maximum payments obligations
under the terms of the contingent note, whereby the contingent payment will be reduced on a dollar for dollar basis for financial performance below EBIT targets, and increased by 29 cents ($0.29) for
each dollar exceeding EBIT targets. The Company also entered into employment agreements with the former shareholder and key employees of RGII and have agreed to issue an aggregate of 600,000 options
to purchase shares of Computer Horizons stock over a three year period.

13

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The
Company completed the allocation of the purchase price to assets and liabilities acquired utilizing outside valuation consultants to assist in this process. Audited historical financial statements
of RGII together with applicable pro forma financial information were filed with the SEC on September 19, 2003.

The
allocation of the purchase price to assets acquired and liabilities assumed was as follows (in thousands):

Allocation of
Purchase PriceAccounts receivable

$
10,958Other current assets


79Property and equipment


1,255Goodwill


13,921Intangibles


2,926Other assets


444Total assets


29,583Accounts payable


1,483Taxes payable


210Accrued expenses


2,520Notes payable


2,636Long-term liabilities


593Total liabilities


7,442Net assets

$
22,141


Purchased
intangibles totaling $2.9 million included unfunded backlog, funded backlog, software and non compete agreements. $13.9 million was recorded as goodwill.

The
acquisition will be treated as a purchase of assets for tax purposes. Accordingly, goodwill will be subject to amortization for tax purposes over fifteen years.

Pro Forma Results

Effective
July 1, 2003, the results of RGII's operations have been included in the consolidated financial statements of the Company. The following unaudited pro forma financial information
presents the combined results of operations of the Company and RGII as if the acquisition had occurred as of the beginning of the periods presented. The revenues and results of operations included in
the following pro forma unaudited consolidated condensed statement of operations is not considered necessarily

14

---

indicative
of the results of operations for the periods specified had the transaction actually been completed at the beginning of the period.

|                                                                 |                 | Actual |            | Pro Forma (in thousands) |  
|---------------------------------------------------------------- | --------------- | ------ | ---------- | ------------------------ | -
|
|
|Revenues:                                                        |                 |        |            |                          |  
|                                                                 | IT Services     |        | $          | 32,235                   |  
|                                                                 | Solutions Group |        |            | 27,016                   |  
|                                                                 | Chimes          |        |            | 5,208                    |  
|                                                                 |                 |        |            |                          |  
|Total                                                            |                 |        | 64,459     |                          |  
|Loss before minority interest and change in accounting principle |                 |        | (2,471     | )                        |  
|Minority interest                                                |                 |        | 21         |                          |  
|Cumulative effect of change in accounting principle              |                 |        |           |                          |  
|                                                                 |                 |        |            |                          |  
|Net loss                                                         |                 | $      | (2,450     | )                        | $
|                                                                 |                 |        |            |                          |  
|Loss per share  (basic & diluted):                              |                 |        |            |                          |  
|Net loss                                                         |                 | $      | (0.08      | )                        | $
|Weighted average number of shares outstanding  basic & diluted  |                 |        | 30,548,000 |                          |  

The
unaudited pro forma financial information above reflects the following adjustments to the historical consolidated financial statements for the nine months ended September 30, 2003:
$1.0 million amortization expense on purchased intangible assets, elimination of acquisition related costs of $1.8 million, $55,000 reduction of interest income for cash consideration
paid less interest expense reduction pertaining to RGII debt and $66,000 adjustment to taxes to record income taxes for RGII as if it was a C-Corporation and to record income tax effect of
pro forma adjustments.

On
January 31, 2003, the Company acquired the IT Solutions operations of Global Business Technology Solutions (GBTS), from Alea (Bermuda) Limited, a member of the Alea Group of companies and
Westfield Services, Inc., a subsidiary of Westfield Financial Corporation for $400,000. The outsourcing facility and its IT professionals are located in Chenni (Madras), India. This transaction
was accounted for as a purchase and the entire purchase price was allocated to goodwill. Pro forma information has not been presented as the amounts are not material.

9.     Sale of Subsidiaries

On
February 14, 2003, the Company sold the business and net assets of Computer Horizons e-Solutions (Europe) Limited, ("Solutions UK") to Systems Associates Limited for 92,822
British Pounds Sterling (approximately US$145,500). The loss from the transaction was $273,000.

On
March 25, 2002, the Company sold the net assets of Princeton Softech to Apax Partners, Inc. and LLR Partners, for cash of $16 million, including amounts held in escrow of
$1.5 million. The gain from the transaction was initially estimated as $3.6 million and was adjusted in the fourth quarter of 2002 to $3.2 million due to a purchase price
adjustment. During the second quarter of 2003, the Company received approximately $748,000 of the escrow. The results of operations are included in the consolidated financial statements through
February 28, 2002 within the Solutions group.

On
April 17, 2001, the Company sold the SELECT Software Tools division "Select" of Princeton Softech to Aonix, a member of the Gores Technology Group, for approximately $895,000 including

15

---

$545,000
of cash received and a note receivable of $350,000, subsequently written off with the sale of Princeton Softech on March 25, 2002. This sale included all the software assets and
intellectual property rights of Select and was sold at book value. The results of operations are included in the consolidated financial statements through April 17, 2001 within the Solutions
group.

10.   Purchase of Treasury Stock

In
April of 2001, the Board of Directors approved the repurchase in the open market of up to 10% of its common shares outstanding, or approximately 3.2 million shares. As of the filing of this
report, the Company had repurchased, in the open market, 3,114,900 shares of its stock at an average price of $3.47 per share for an aggregate purchase amount of $10.8 million. There were no
stock repurchases during the third quarter and as of September 30, 2003 the remaining authorization for repurchase is approximately 93,000 shares.

11.   Asset-Based Lending Facility

On
July 31, 2001, amended February 14, 2003, the Company entered into a secured asset-based lending facility that replaced its two unsecured discretionary lines of credit. This new line
of credit is a three-year, $40 million facility with availability based primarily on eligible customer receivables. The interest rate for the first ninety days from closing was
Prime plus 0.5%, thereafter the rate was LIBOR plus 2.75% based on the unpaid principal. The borrowing base less outstanding loans must equal or exceed $17.5 million. At the time of closing
there was a $170,000 commitment fee paid to the agent. As of September 30, 2003, the Company had no outstanding loan balance against the facility. Based on the Company's eligible customer
receivables and cash balances, $16.3 million was available for borrowing as of September 30, 2003. The fee for the unused portion of the line of credit is 0.375% per annum charged to the
Company monthly. This charge was approximately $84,000 and $104,000 for the nine-month periods ended September 30, 2003 and 2002, respectively. This line of credit includes
covenants relating to the maintenance of cash balances and providing for limitations on incurring obligations and spending limits on capital expenditures.

12.   Tax Benefit Reserve

On
March 9, 2002, the Job Creation and Worker Assistance Act of 2002 (the "Act") was enacted into law. This Act contained many economic and tax incentives, including the extension of the
carryback period for losses arising in years ending during 2001 and 2002 to five years from the previous two year carryback rule. As a result, the Company's tax refund claim of approximately
$10 million at December 31, 2001 was increased to approximately $30 million. The additional refund amount of $20 million was received in January 2003.

During
1998, the Company completed a business combination, which, for financial statement purposes, has been accounted for as a pooling-of-interests. For income tax purposes
the Company believes the transaction qualifies as a taxable purchase that gives rise to future tax deductions. Upon the sale of the acquired business in 2001, these deductions were recognized for tax
purposes. The tax benefit of $19.6 million relating to the part of these deductions that was carried back to prior years was included in refundable income taxes in 2002. Since the tax structure
of the transaction is subject to determination by the tax authorities, the Company has recorded a reserve for the tax benefits resulting from the carryback and has not recorded deferred tax assets for
the tax benefits being carried forward. When resolved, the Company will record a deferred tax asset for the part of the tax benefits being carried forward and a tax benefit for the portion that was
carried back, net of an appropriate valuation allowance. The tax benefit will be reflected as an increase in additional paid-in capital. Any adjustments to the valuation allowance will be
charged or credited to income.

16

---

The
Internal Revenue Service is currently examining the Company's federal income tax returns for the years ended December 31, 2001 and 2000, along with its federal refund claims for the
calendar years 1996 through 1999. The additional refund amount received in January 2003 is shown as a liability until the audit is completed.

13.   Special Items

For
the three months ended September 30, 2003, the Company incurred special charges of $800,000 related to the unilateral acquisition proposal and activities of Aquent LLC. The Company also
incurred a restructuring expense of $787,000 relating primarily to the closing of facilities in the United Kingdom. During the first nine months of 2003, the Company incurred special charges of
$8.8 million consisting
primarily of a severance package for the former CEO and expenses related to Aquent LLC. The separation package of the former CEO, included a $3.5 million severance payment and $200,000 in
continued medical coverage. In addition, a $5.1 million expense pertaining to the unilateral acquisition proposal and activities of Aquent LLC was recorded. This expense is primarily
attributable to approximately $3.0 million of legal fees, $1.0 million in financial advisor fees and $1.0 million of proxy solicitation and other fees. As management considers
these special items to be infrequent and material in nature, the Company has reported the expenses on a separate line for full disclosure purposes, however, the amounts are reported within operating
income. The Company also incurred a restructuring expense of $3.0 million for the nine months ended September 30, 2003 relating primarily to the closing of facilities in Canada and the
United Kingdom. In addition, the Company voluntarily terminated a sub-contract with ATEB, a privately held company, for financial reasons and recorded a write-off of
approximately $3.1 million due to the uncertainty of the realization of the receivable. ATEB was the primary contractor to develop a new pharmacy system for Royal Ahold. The Company is
continuing recovery efforts for this receivable.

14.   Rescission Offer

From
April 2001 through January 2003, the sale of shares of the Company's common stock pursuant to the Employee Stock Purchase Plan were not exempt from registration or qualification
under federal securities laws. As a result, the Company may have failed to comply with the registration or qualification requirements of federal and applicable state securities laws because the
Company did not register or qualify these stock issuances under either federal or applicable state securities laws.

As
a result the Company intends to make a rescission offer to all those persons who purchased shares of common stock pursuant to the Employee Stock Purchase Plan during the affected periods. The
rescission offer will be made pursuant to a registration statement filed under the Securities Act and pursuant to applicable state securities laws. In this rescission offer, the Company is offering to
repurchase the shares subject to our rescission offer for the price paid per share plus interest from the date of purchase until the rescission offer expires, at the current statutory rate per year
mandated by the state in which the shares were purchased. The rescission offer will expire approximately 30 days after the effective date of the registration statement. Assuming all of the
shares subject to the rescission offer (approximately 659,000) are tendered in the rescission offer, the aggregate purchase price, excluding interest is estimated to be approximately
$1.8 million. This contingency payment is considered remote by the Company as the current price of the stock is above the price at which the shares would be repurchased.

16.   Aquent/Legal Matters

On
April 29, 2003, the Company filed an action in the United States District Court for the District of New Jersey (the "New Jersey action") against Aquent LLC, seeking (i) to enjoin
Aquent from disseminating false and misleading proxy materials and press releases in support of its two nominees for director positions in connection with the Company's May 14, 2003 Annual
Meeting; (ii) to invalidate

17

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any
proxies secured by Aquent through the use of unlawful proxy solicitation materials; and (iii) to require Aquent to disseminate corrective disclosure that not only amended the false and
misleading proxy materials but also advised CHC shareholders how Aquent's solicitations had violated the securities laws. The court held that Aquent's proxy materials were false and misleading but
invalidated no proxies and permitted Aquent to limit corrective disclosure to new text enclosed with the old proxy materials, which contained the false and misleading statements. On May 30,
2003, the Company filed a Notice of Appeal to the United States Court of Appeals for the Third Circuit, contending, among other things, that the corrective disclosure ordered by the United States
District Court was inadequate and not in compliance with federal securities laws. On October 15, 2003, the Company filed its appellate papers.

On
May 27, 2003, the Company brought an action in the Supreme Court of the State of New York, New York County (the "New York action"), seeking an order invalidating votes for directors Karl
Meyer and Robert Trevisani cast at the Annual Meeting by stockholders of record who sold their shares between the record date and the date of the Annual Meeting. The court in the New York action
denied temporary restraints but on June 11, 2003, deferred ruling on the Company's application for preliminary injunctive relief pending discovery and trial. The matter has been scheduled for a
hearing on December 15, 2003.

On
or about June 2, 2003, Aquent filed a counterclaim in the New Jersey action against the Company and William J. Murphy, the Company's President and Chief Executive Officer, alleging breach of
fiduciary duty and seeking to enjoin the Company from delaying the continuation of the Annual Meeting  at which the certified election results would be
accepted  or otherwise interfering with the seating of the Aquent nominees. Aquent also sought attorneys' fees and costs. On or about June 20, 2003, Aquent filed an amended
counterclaim in the New Jersey action, alleging breach of the duty of care and the duty of loyalty, waste of corporate assets, and violation of the proxy rules under Section 14(a) of the
Securities Exchange Act of 1934. The amended counterclaim sought, essentially, to enjoin the Company from challenging the election of the Aquent nominees, and it sought attorneys' fees and costs. The
Company has filed an answer denying Aquent's allegations.

On
or about July 15, 2003, Aquent filed an Order to Show Cause in the New Jersey action, challenging an amendment to the Company's by-laws adopted by the Board of Directors on
June 30, 2003. The by-law amendment specifies (a) that any request for a special meeting of shareholders must set a date for the meeting not fewer than
seventy-five (75) nor more than ninety (90) days after the date on which the request is received; (b) that any such request shall be ineffective, and any special
meeting cancelled, if the shareholder(s) who sign the request is/are not the holder(s) of the beneficial interest of 10% or more of the Company's issued and outstanding shares on each of the following
dates: the date such request is mailed; the record date for the meeting (to be fixed by the Board within five business days after the receipt of the request); and the date of the meeting; and
(c) that any such request for a special meeting shall be or become ineffective, and any meeting called or noticed pursuant thereto shall be cancelled, if such request of any solicitation
therefore is not made in compliance with applicable law. The court took testimony in the New Jersey action on August 7, 2003 and directed the parties to submit additional briefs on the issues.
The matter has been fully briefed and submitted and is pending before the court.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF  FINANCIAL CONDITION AND RESULTS OF OPERATIONSFor the Periods Ended September 30, 2003 and September 30, 2002

FORWARD-LOOKING STATEMENTS

Statements
included in this Management's Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this document that do not relate to present or historical conditions
are "forward-looking statements" within the meaning of that term in Section 27A of the Securities Act of 1933, as amended, and in Section 21F of the Securities Exchange Act of 1934, as
amended. Additional oral or written forward-looking statements may be made by the Company from time to time, and such statements may be included in documents that are filed with the Securities and
Exchange Commission (SEC). Such forward-looking statements involve risks and uncertainties that could cause results or outcomes to differ materially from those expressed in such forward-looking
statements. Forward-looking statements may include, without limitation, statements relating to the Company's plans, strategies, objectives, expectations and intentions and are intended to be made
pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as "believes," "forecasts," "intends," "possible," "expects," "estimates," "anticipates," or
"plans" and similar expressions are intended to identify forward-looking statements. Among the important factors on which such statements are based are assumptions concerning the anticipated growth of
the information technology industry, the continued need of current and prospective customers for the Company's services, the availability of qualified professional staff, and price and wage inflation.

RESULTS OF OPERATIONS

Revenues.Revenues decreased to $64.5 million in the third quarter of 2003 from $73.6 million in the third quarter of 2002, a
decrease of $9.1 million or 12.4%. Revenues decreased to $183.5 million in the nine months of 2003 from $230.1 million in the nine months of 2002, a decrease of
$46.6 million or 20.3%.

Solutions
Group revenues increased to $27.0 million in the third quarter of 2003 from $20.2 million in the third quarter of 2002, an increase of $6.8 million or 33.7%. For the
third quarter of 2003, RGII revenues totaled $9.3 million. Solutions Group revenues increased to $65.3 million in the nine months of 2003 from $60.3 million in the nine months of
2002, an increase of $5.0 million or 8.3%. The increase in Solutions Group revenues for the third quarter and first nine months of 2003 is attributable to the acquisition of RGII.

Excluding
the revenue of the business unit held for sale, Princeton Softech, Inc., in the nine months of 2002, Solutions Group revenues increased $7.9 million or 13.8% to
$65.3 million.

IT
Services revenues decreased to $32.2 million in the third quarter of 2003 from $49.1 million in the third quarter of 2002, a decrease of $16.9 million or 34.4%. For the third
quarter of 2003, IT Services consultant average headcount decreased by 22.1%, accounting for approximately $10.9 million of the revenue decrease. The balance of the decrease in revenue
(approximately $6 million) is attributable to a reduction in average bill rates. IT Services revenues decreased to $103.7 million in the first nine months of 2003 from
$157.8 million in the first nine months of 2002, a decrease of $54.1 million or 34.3%, which is attributable to the softness in the IT Staffing business. The decrease in IT Services
revenue for the quarter and the first nine months of 2003, is the result of continued decreases in the demand for temporary technology workers, the trend of companies to outsource technology jobs
offshore, the impact of pricing decreases by customers and the lagging economy.

For
the first nine months of 2003, IT Services consultant average headcount decreased by 23.8%, accounting for approximately $38 million of the revenue decrease. The balance of the decrease in

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revenue
(approximately $16 million) is attributable to a reduction in average bill rates. The Company does not anticipate any growth during the remainder of 2003 in IT Services headcount
levels.

Chimes
revenue increased to $5.2 million in the third quarter of 2003 from $4.3 million in the third quarter of 2002, an increase of $900,000, or 20.9%. Chimes revenue, for the first
nine months of 2003, increased to $14.5 million from $12.0 million, an increase of $2.5 million or 20.8% from the comparable period of 2002. This increase in Chimes revenue, for
the first nine months of 2003, is primarily due to an increase of approximately $2.5 million in revenue from new customers in this segment.

Direct Costs.Direct costs decreased to $44.4 million and $128.7 million in the third quarter and first nine months of 2003,
respectively, from $52.9 million and $167.6 million in the comparable periods of 2002.





Consolidated gross margin, revenues less direct costs, increased to 31.1% and 29.9% in the third quarter and nine months ended September 30, 2003 from 28.1% and 27.2% in the same periods of
2002. In the Company's Solutions Group, gross profit increased to $8.7 million, or 32% in the third quarter of 2003 as a result of the RGII acquisition. Without RGII, gross profit declined
approximately $1.0 million during the third quarter of 2003 and declined to 31.6% from 33.1% for the nine months ended September 30, 2003 and 2002, respectively. These declines were as a
result of lower utilization rates in the Healthcare Practice and higher direct costs in the Education division. Gross margin in the Company's IT Services segment decreased to 20.2% and 20.0% from
21.3% and 20.3% for the third quarter and first nine months ended September 30, 2003 and 2002, respectively. The decrease is attributable to a reduction in staff utilization (billable
hours/available hours) in the third quarter of 2003, primarily resulting from the Northeast blackout. Gross margin in the Company's Chimes segment increased to 93.7% and 92.7% from 90.9% and 87.6% for
the third quarter and first nine months ended September 30, 2003 and 2002, respectively, due to the increase in revenue from new customers at a higher gross margin.

Excluding
the asset held for sale, Princeton Softech, Inc., in the first nine months of 2002, direct costs decreased to $128.7 million in the first nine months of 2003 from
$167.1 million in the same period of 2002. Gross margin in the first nine months of 2002 was 26.4%.

The
Company's consolidated gross margins improvement is primarily attributable to the change in the revenue mix, including RGII, among the Company's business segments. Chimes and the Solutions Group
are higher gross margin businesses than the Company's IT Services segment. For the quarter ended September 30, 2003, Chimes and Solutions Group revenue totaled 50% of consolidated revenue,
compared to 33.2% of consolidated revenue for the comparable period in 2002. For the first nine months of 2003, Chimes and Solutions Group revenue totaled 43.5% of consolidated revenue, compared to
31.4% of consolidated revenue for the comparable period in 2002.

Costs and Expenses.Selling, general and administrative expenses increased to $22.5 million in the third quarter of 2003 from
$22.3 million in the comparable period of 2002. As a percentage of revenue, the Company's SG&A expenses increased to 34.9% in the third quarter of 2003 from 30.4% in the comparable period of
2002. The expenses in the third quarter of 2003 included $787,000 of restructuring charges primarily related to the closing of the Chimes UK facility and $800,000 of special charges related to the
unilateral acquisition proposal and activities of Aquent LLC. Without these special items, SG&A expenses would have decreased to $20.9 million or 32.4% of revenue.

SG&A
expense increased to $72.3 million or 39.4% of revenue in the first nine months of 2003 from $71.3 million or 31.0% of revenue for the comparable period of 2002. The expenses in
2003 included special charges of $8.8 million or 4.8% of revenue, consisting of $3.7 million for the separation package of the former CEO and $5.1 million pertaining to expenses
related to the unilateral acquisition proposal and activities of Aquent LLC, restructuring charges of $3.0 million, or 1.6% of revenue, for terminated leases ($1.3 million), severance
($1.4 million) and general office closure expense ($288,000) relating primarily to the closing of facilities in Canada and the United Kingdom. In addition, the

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Company
voluntarily terminated a sub-contract with ATEB, a privately held company, for financial reasons and recorded a write-off of approximately $3.1 million due to
the uncertainty of the realization of the receivable. ATEB was the primary contractor to develop a new pharmacy system for Royal Ahold. The Company is continuing recovery efforts for this receivable.
The expenses in 2002 included assets held for sale (Princeton Softech, Inc.) of $4.3 million. Without these special items in 2003 and 2002, SG&A expenses would have decreased to
$57.4 million in the first nine months of 2003 from $67.0 million in the comparable periods of 2002. This decrease in SG&A expenses was primarily attributable to cost reductions in all
segments, with approximately $2 million from rent savings and the balance primarily related to staff reduction and personnel costs.

Loss from Operations.The Company's loss from operations totaled $2.9 million in the third quarter of 2003, an increase to the loss
of $1.3 million, from a loss of $1.6 million in the third quarter of 2002. Operating margins were a loss of 4.5% in the third quarter of 2003 as compared to a loss of 2.2% in the third
quarter of 2002. This increase in the loss from operations in 2003 included a special charge of $800,000 or 1.2% of revenue, the entire amount related to the unilateral acquisition proposal and
activities of Aquent LLC. In addition, the Company incurred restructuring charges of $787,000, or 1.2% of revenue, relating primarily to the closing of facilities in the United Kingdom and
amortization of intangibles of $526,000, or 0.8% of revenue. The composition of the operating loss, excluding special items in 2003, included a loss of $1.2 million in IT Services, profit of
$1.0 million in the Solutions Group and a loss of $632,000 in Chimes. This compares to the operating loss of $1.6 million in the third quarter of 2002, consisting of a loss of $109,000
in IT Services, profit of $522,000 in the Solutions Group and a loss of $2.0 million in Chimes. Operating margins, excluding these special items, were a loss of 1.3% in the third quarter of
2003 as compared to a loss of 2.2% in the third quarter of 2002.

The
Company's loss from operations totaled $18.0 million in the first nine months of 2003, an increase of $9.2 million, from a loss of $8.8 million in the comparable period of
2002. The loss from operations in 2003 included a special charge of $8.8 million, or 4.8%, consisting of $3.7 million for the separation package of the former CEO and $5.1 million
pertaining to expenses related to the unilateral acquisition proposal and activities of Aquent LLC, restructuring charges of $3.0 million, or 1.6% of revenue, relating primarily to the closing
of facilities in Canada and the United Kingdom, amortization of intangibles of $526,000, or 0.3% of revenue and a special bad debt charge of $3.1 million, or 1.7% of revenue due to the
write-off of a terminated contract with a customer for financial reasons. The loss from operations in 2002 included the loss from operations of the asset held for sale, Princeton
Softech, Inc., of $1.9 million, or 1.1% of revenue. The composition of the 2003 operating loss, excluding the special items noted above included a loss of $3.1 million in IT
Services, profit of $4.2 million in the Solutions Group and a loss of $3.7 million in Chimes. This compares to the operating loss of $6.8 million, excluding operations of
Princeton Softech, in the first nine months of 2002, consisting of a loss of $1.4 million in IT Services, income of $1.7 million in the Solutions Group and a
loss of $7.1 million in Chimes. Operating margins, excluding all special items, were a loss of 1.4% in the first nine months of 2003 as compared to a loss of 3.0% in the comparable period of
2002.

Other Income/(Expense).Other income was $78,000 in the third quarter of 2003, compared to other income of $247,000 in the comparable
period of 2002. This decrease of other income during the third quarter of 2003 was due to decreased interest income primarily resulting from lower interest rates on cash investments. Other income was
$63,000 in the first nine months of 2003, compared to other income of $4.1 million in the comparable period of 2002. This difference was primarily due to the gain on the sale of Princeton
Softech in 2002.

Provision for Income Taxes.The effective tax rates for Federal, state and local income taxes were 14% and 26% for the third quarter and
first nine months of 2003, respectively, compared with 34% for the comparable periods of 2002. The decrease in the effective tax rates was primarily attributable to valuation allowances recorded for
state and foreign net operating loss carryovers.

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Net Loss.Net loss for the third quarter of 2003 was $2.5 million, or $0.08 loss per diluted share, compared to net loss of
$918,000, or $0.03 loss per diluted share for the third quarter of 2002, an increased loss of $1.6 million. The effect of special charges, restructuring charges and amortization of intangibles
amounted to $0.06 loss per share, net of taxes, in the third quarter of 2003. For the first nine months of 2003, the net loss was $13.3 million, or $0.44 loss per diluted share, compared to a
net loss of $33.0 million, or $1.05 loss per diluted share for the first nine months of 2002. The net loss in the first nine months of 2002 includes a charge for the cumulative effect of change
in accounting principle of $29.9 million, or $0.95 per share, net of taxes, and operations of assets held for sale and the gain on sale of assets, which amounted to $1.1 million, or
$0.03 loss per share, net of taxes.

Liquidity and Capital Resources

At
September 30, 2003, the Company had approximately $70 million in working capital, of which $50.7 million was cash and cash equivalents.

Net
cash provided by operating activities in the first nine months of 2003 was $17.9 million, consisting primarily of the tax refund received and a reduction in client accounts receivable.

Net
cash used in investing activities in the first nine months of 2003 was $24.7 million, consisting primarily of the purchase of RGII.

Net
cash used in financing activities in the first nine months of 2003 was $2.6 million, consisting of the payment of the notes for the acquisition of RGII. In April of 2001, the Board of
Directors approved the repurchase in the open market of up to 10% of its common shares outstanding, or approximately 3.2 million shares. As of the date of filing of this report, the Company had
repurchased, in the open market, 3,114,900 shares of its stock at an average price of $3.47 per share for an aggregate purchase amount of $10.8 million. There were no stock repurchases during
the third quarter and as of September 30, 2003, the remaining authorization for repurchase is approximately 93,000 shares.

At
September 30, 2003, the Company had a current ratio position of 2.6 to 1. The Company believes that its cash and cash equivalents, available borrowings and internally generated funds will be
sufficient to meet its working capital needs through the next year.

On
July 31, 2001, amended February 14, 2003, the Company entered into a secured asset-based lending facility that replaced its two unsecured discretionary lines of credit. This new line
of credit is a three-year, $40 million facility with availability based primarily on eligible customer receivables. The interest rate for the first ninety days from closing was
Prime plus 0.5%, thereafter the rate was LIBOR plus 2.75% based on the unpaid principal. The borrowing base less outstanding loans must equal or exceed $17.5 million. At the time of closing
there was a $170,000 commitment fee paid to the agent.

As
of September 30, 2003, the Company had no outstanding loan balance against the facility. Based on the Company's eligible customer receivables and cash balances, $16.3 million was
available for borrowing as of September 30, 2003. The fee for the unused portion of the line of credit is 0.375% per annum charged to the Company monthly. This charge was approximately $84,000
and $104,000 for the nine month periods ended September 30, 2003 and 2002, respectively. This line of credit includes covenants relating to the maintenance of cash balances and providing for
limitations on incurring obligations and spending limits on capital expenditures.

As a result of the Company's acquisition of RGII, the seller of RGII may be entitled to contingent payments based on RGII's performance against profitability objectives over the next three years. The
contingent payments are evidenced by a contingent note with a face value of $10 million that is payable over three years, only if certain financial performance objectives are met. These
financial performance objectives are based on earnings before interest and taxes, ("EBIT") targets totaling $19.8 million over a three-year period. There are no minimum or maximum payment
obligations under the terms of the contingent note, whereby the contingent payment will be reduced on a dollar for dollar basis for

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financial performance below EBIT targets and increased by 29 cents ($0.29) for each dollar exceeding EBIT targets. The payments, if the applicable EBIT targets are met, will be due as follows: 2004
payment of $1.7 million, 2005 payment of $3.3, 2006 payment of $5 million. These payments will be reduced or increased based on actual EBIT performance.

Contractual Obligations and Commercial Commitments

The
Company does not utilize off balance sheet financing other than operating lease arrangements for office premises and related equipment. Leases are short term in nature and non-capital.
The following table summarizes all commitments under contractual obligations as of September 30, 2003:

|                       |  | Obligation Due
|---------------------- |  | --------------
|
|
|Operating leases       |  | $             
|Other long-term        |  |               
|                       |  |               
|Total Cash Obligations |  | $             
|                       |  |               

Recent Accounting Pronouncements

In
June 2001, the Financial Accounting Standards Board approved the issuance of SFAS No. 141, "Business Combinations" and in July 2001, SFAS 142, "Goodwill and Other
Intangible Assets." The new standards require that all business combinations initiated after June 30, 2001 must be accounted for under the purchase method. In addition, all intangible assets
acquired that are obtained through contractual or legal right, or are capable of being separately sold, transferred, licensed, rented or exchanged shall be recognized as an asset apart from goodwill.
Goodwill and intangibles with indefinite lives will no longer be subject to amortization, but will be subject to at least an annual assessment for impairment by applying a fair value based test. The
Company adopted SFAS 142 as of January 1, 2002 and in compliance with this new regulation has discontinued the amortization of goodwill. For the effect of this statement on the Company
see Note 3.

In
November 2002, the EITF reached a consensus on Issue No. 00-21, "Accounting for Revenue Arrangements with Multiple Deliverables." This Issue provides guidance on when and
how to separate elements of an arrangement that may involve the delivery or performance of multiple products, services and rights to use assets into separate units of accounting. The guidance in the
consensus is effective for revenue arrangements entered into in fiscal periods ending after December 15, 2003. The transition provision allows either prospective application or a cumulative
effect adjustment upon adoption. The effect of the adoption of this statement was immaterial to the Company.

In
December 2002, the Financial Accounting Standards Board approved the issuance of SFAS No. 148, "Accounting for Stock-Based Compensation - Translation and Disclosure." This
statement amends FASB Statement No. 123, "Accounting for Stock-Based Compensation," to provide alternative methods of transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition, this Statement amended the disclosure requirements of Statement 123 to require prominent disclosures in both annual and interim financial
statements about the method of accounting for stock-based employee compensation and the effect of the methods used on reported results. The Company adopted the disclosure provisions as of
December 31, 2002.

The
exercise price per share on all options granted may not be less than the fair value at the date of the option grant. The Company applies Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees," as modified by FIN 44, "Accounting for Certain Transactions Involving Stock Compensation," in accounting for stock-based employee compensation, whereby no
compensation

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cost
had been recognized for the plans. The Company expects to continue following the guidance under APB 25 for stock based compensation to employees and has therefore included the disclosure
requirements of FASB 148 in the accompanying financial statements.

Effective
on January 1, 2003 the Company adopted Financial Accounting Standards Board No. 146, "Accounting for Exit or Disposal Activities," ("SFAS 146"), which supersedes
Emerging Issues Task Force Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in
a Restructuring)." The new standards require that a liability for a cost associated with an exit or disposal activity, including costs related to terminating a contract that is not a capital lease and
the termination benefits that employees who are involuntarily terminated receive under the terms of a one-time benefit arrangement that is not ongoing or an individual
deferred-compensation contract, be recognized when the liability is incurred. Previously, under Issue No. 94-3, a liability for an exit cost was recognized at the date of an
entity's commitment to an exit plan, which may not necessarily meet the definition of a liability. SFAS 146 is effective for exit or disposal activities of the Company that are initiated after
December 31, 2002. The Company adopted SFAS 146 as of January 1, 2003 (See Note 6).

In
May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." It establishes classification and
measurement standards for three types of freestanding financial instruments that have characteristics of both liabilities and equity. Instruments within the scope of SFAS 150 must be classified
as liabilities within the Company's financial statements. The provisions of SFAS No. 150 are effective for (1) instruments entered into or modified after May 31, 2003 and
(2) pre-existing instruments as of July 1, 2003. SFAS 150 is not expected to have a material effect on the Company's financial statements.

In
January 2003, the FASB issued Financial Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46"), which addresses consolidation by business enterprises of
variable interest entities (VIEs). The accounting provisions and disclosure requirements of FIN 46 are effective immediately for VIEs created after January 31, 2003, and are effective for
reporting periods ending after December 15, 2003, for VIEs created prior to February 1, 2003. Although the Company is still evaluating the impact of FIN 46, it is not expected to have a
material effect on the Company's financial statements.

Item 4.    Control and Procedures

Disclosure Controls and Procedures

The
Company's CEO and CFO have evaluated the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on such evaluation, the Company's Chief Executive Officer and Chief Financial Officer
have concluded that, as of the end of such period, the Company's disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information
required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended.

Internal Controls over Financial Reporting

There
have not been any changes in the Company's internal controls over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the
Securities Exchange Act of 1934, as amended) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company's internal
control over financial reporting.

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PART II Other Information

Item 1.Legal Proceedings

On
April 29, 2003, the Company filed an action in the United States District Court for the District of New Jersey (the "New Jersey action") against Aquent LLC, seeking (i) to enjoin
Aquent from disseminating false and misleading proxy materials and press releases in support of its two nominees for director positions in connection with the Company's May 14, 2003 Annual
Meeting; (ii) to invalidate any proxies secured by Aquent through the use of unlawful proxy solicitation materials; and (iii) to require Aquent to disseminate corrective disclosure that
not only amended the false and misleading proxy materials but also advised CHC shareholders how Aquent's solicitations had violated the securities laws. The court held that Aquent's proxy materials
were false and misleading but invalidated no proxies and permitted Aquent to limit corrective disclosure to new text enclosed with the old proxy materials, which contained the false and misleading
statements. On May 30, 2003, the Company filed a Notice of Appeal to the United States Court of Appeals for the Third Circuit, contending, among other things, that the corrective disclosure
ordered by the United States District Court was inadequate and not in compliance with federal securities laws. On October 15, 2003, the Company filed its appellate papers.

On
May 27, 2003, the Company brought an action in the Supreme Court of the State of New York, New York County (the "New York action"), seeking an order invalidating votes for directors Karl
Meyer and Robert Trevisani cast at the Annual Meeting by stockholders of record who sold their shares between the record date and the date of the Annual Meeting. The court in the New York action
denied temporary restraints but on June 11, 2003, deferred ruling on the Company's application for preliminary injunctive relief pending discovery and trial. The matter has been scheduled for a
hearing on December 15, 2003.

On
or about June 2, 2003, Aquent filed a counterclaim in the New Jersey action against the Company and William J. Murphy, the Company's President and Chief Executive Officer, alleging breach of
fiduciary duty and seeking to enjoin the Company from delaying the continuation of the Annual Meetingat which the certified election results would be acceptedor
otherwise interfering with the seating of the Aquent nominees. Aquent also sought attorneys' fees and costs. On or about June 20, 2003, Aquent filed an amended counterclaim in the New Jersey
action, alleging breach of the duty of care and the duty of loyalty, waste of corporate assets, and violation of the proxy rules under Section 14(a) of the Securities Exchange Act of 1934. The
amended counterclaim sought, essentially, to enjoin the Company from challenging the election of the Aquent nominees, and it sought attorneys' fees and costs. The Company has filed an answer denying
Aquent's allegations.

On
or about July 15, 2003, Aquent filed an Order to Show Cause in the New Jersey action, challenging an amendment to the Company's by-laws adopted by the Board of Directors on
June 30, 2003. The by-law amendment specifies (a) that any request for a special meeting of shareholders must set a date for the meeting not fewer than
seventy-five (75) nor more than ninety (90) days after the date on which the request is received; (b) that any such request shall be ineffective, and any special
meeting cancelled, if the shareholder(s) who sign the request is/are not the holder(s) of the beneficial interest of 10% or more of the Company's issued and outstanding shares on each of the following
dates: the date such request is mailed; the record date for the meeting (to be fixed by the Board within five business days after the receipt of the request); and the date of the meeting; and
(c) that any such request for a special meeting shall be or become ineffective, and any meeting called or noticed pursuant thereto shall be cancelled, if such request of any solicitation
therefore is not made in compliance with applicable law. The court took testimony in the New Jersey action on August 7, 2003 and directed the parties to submit additional briefs on the issues.
The matter has been fully briefed and submitted and is pending before the court.

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Item 6.Exhibits and Reports on Form 8-K



|10.1 |  | Employment agreement between Computer Horizons Corp. and Kristin Evins.*                                                   
|----- |  | ---------------------------------------------------------------------------------------------------------------------------
|31.1 |  | CEO Certification required by Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934.                          
|31.2 |  | CFO Certification required by Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934.                          
|32.1 |  | CEO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|32.2 |  | CFO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.





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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.

|      |  |                  |  |  |  | COMPUTER HORIZONS CORP.(Registrant)                                                     
|----- |  | ---------------- |  |  |  | ----------------------------------------------------------------------------------------
|DATE: |  | January 21, 2004 |  |  |  | /s/ William J. MurphyWilliam J. Murphy, President and
CEO
(Principal Executive Officer) 
|DATE: |  | January 21, 2004 |  |  |  | /s/ Michael J. SheaMichael J. Shea,
Vice President and CFO
(Principal Financial Officer)
|DATE: |  | January 21, 2004 |  |  |  | /s/ Kristin EvinsKristin Evins,
Controller
(Principal Accounting Officer)               

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