UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                   FORM 10-Q

(Mark One)

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

                  For the quarterly period ended June 30, 1999


                                       OR


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


               For the transition period from _______ to ________

                         Commission File No. 0 - 20660
                            COMPUTER CONCEPTS CORP.
             (Exact name of registrant as specified in its charter)


            Delaware                             11-2895590
(State or other jurisdiction of               (I.R.S. Employer
incorporation or organization)                 Identification  No.)


                   80 Orville Drive, Bohemia, N.Y.         11716
               (Address of principal executive offices) (Zip Code)


Registrant=s telephone number, including area code     (516) 244-1500


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

     The number of shares of $.0001 par value stock outstanding as of August 10,
1999 was 20,755,919.


<PAGE>


                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES

                                     INDEX




PART I -  FINANCIAL INFORMATION                                          Page
                                                                         ----

Condensed Consolidated Balance Sheets
as of June 30, 1999 and December 31, 1998                                  3

Condensed Consolidated Statements of Operations
and Comprehensive Income For the Three and
Six Months Ended June 30, 1999 and 1998                                    4

Condensed Consolidated Statements of Cash Flows
For the Six Months ended June 30, 1999 and 1998                            5

Notes to Condensed Consolidated Financial Statements                  6 - 14

Management=s Discussion and Analysis of Financial
Condition and Results of Operations                                  15 - 21




PART II - OTHER INFORMATION

Item 1. Legal Proceedings                                                 22

Item 2. Changes in Securities                                             22

Item 3. Defaults Upon Senior Securities                                   22

Item 4.  Submission of Matters to a Vote of Security Holders              22

Item 5. Other Information                                                 22

Item 6. Exhibits and Reports on Form 8-K                                  22

Signatures                                                                23


<PAGE>


                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                   as of June 30, 1999 and December 31, 1998
                       (in thousands, except share data)


<TABLE>
<CAPTION>
                                                  June 30,       December 31,
                                                    1999             1998
                                                 ----------      -------------
                                                (Unaudited)
                                                 ----------
                                 ASSETS

<S>                                               <C>               <C>
Current Assets:
  Cash and cash equivalents                       $ 15,406          $ 8,176
  Accounts receivable, net of
     allowance for doubtful accounts
     of $1,067 and $1,350 in 1999
     and 1998,  respectively                         6,792           27,412
  Installment receivables                              -             16,406
  Inventories                                          384              419
  Deferred tax assets, current                         -                306
  Advances to  officers                                740              895
  Prepaid expenses and other current assets          2,689           10,128
                                                  --------         --------
      Total current assets                          26,011           63,742

Installment accounts receivable, due
     after one year                                    -              7,908
Property and equipment, net                          1,354            3,564
Software costs, net                                  1,822            5,594
Excess of cost over fair value of net
  assets acquired, net of
  accumulated amortization of $1,767
  and $4,239 in 1999 and 1998, respectively          3,417            8,610
Investment  in Softworks                            10,797              -
Deferred tax assets, noncurrent                        -                484
Other assets                                            82            2,000
                                                  ========         ========
                                                  $ 43,483         $ 91,902
                                                  ========         ========

                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
   Accounts payable and accrued expenses           $ 4,478          $11,428
   Current portion of long- term debt                   16            6,117
   Income taxes payable                                 50            2,207
   Deferred installment revenue                        -              7,314
   Deferred maintenance revenue                         42            9,107
                                                  --------         --------
     Total current liabilities                       4,586           36,173

Deferred installment revenue, earned after
  one year                                             -              7,883
Deferred maintenance revenue, earned after
  one year                                              21            3,924
Long-term debt, net of current portion                 -              1,403
                                                  --------         --------
     Total liabilities                               4,607           49,383
                                                  --------         --------
Minority interest                                      -              8,503
Commitments and contingencies
Shareholders' equity:
   Common stock, $.0001 par value;
     150,000,000 authorized; 20,755,919 shares
     in 1999 and 19,324,839 shares in 1998
     issued and outstanding                             2                 2
   Additional paid-in capital                     108,655           106,515
   Accumulated deficit                            (69,477)          (72,194)
   Accumulated other comprehensive loss              (304)             (307)
                                                 --------          --------
     Total shareholders= equity                    38,876            34,016
                                                 --------          --------
                                                 $ 43,483          $ 91,902
                                                 ========          ========

           See Notes to Condensed Consolidated Financial Statements.
</TABLE>

<PAGE>

                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
                                  (Unaudited)
                  For the Three and Six Months Ended June 30,
                     (in thousands, except per share data)
<TABLE>
<CAPTION>
                                             Three Months Ended             Six Months Ended
                                             ------------------             ----------------
                                                  June 30,                      June 30,
                                                  --------                      --------
                                            1999            1998           1999          1998
                                            ----            ----           ----          ----
<S>                                        <C>             <C>            <C>          <C>
Revenue:
  Software licenses, net                  $   218         $ 6,275        $ 6,940      $ 10,372
  Maintenance                                  10           2,625          3,549         5,176
  Professional services                     9,417           2,586         13,124         3,562
                                          -------         -------        -------       -------
                                            9,645          11,486         23,613        19,110
                                          -------         -------        -------       -------
Cost of revenue:
  Software licenses                            42             205            277           698
  Maintenance                                 -             1,611            548         3,257
  Professional services                     8,573           2,187         11,816         3,540
                                          -------         -------        -------       -------
                                            8,615           4,003         12,641         7,495
                                          -------         -------        -------       -------
Gross margin                                1,030           7,483         10,972        11,615
                                          -------         -------        -------       -------
Operating expenses
  Research and development                    942           1,245          5,011         2,220
  Sales and marketing                       3,611           7,527         12,135        11,693
  General and administrative                1,726           2,736          4,641         4,689
  Amortization and depreciation               995             672          2,679         1,239
                                          -------         -------        -------       -------
                                            7,274          12,180         24,466        19,841
                                          -------         -------        -------       -------
Operating loss                             (6,244)         (4,697)       (13,494)       (8,226)
Other income (expense)
  Gain on partial disposition of
     subsidiary                            14,410           6,627         16,441         6,627
  Equity in loss of Softworks                (125)            -             (125)          -
  Interest income (expense), net               27            (536)            16          (559)
  Minority interest in earnings of
     subsidiary                              -                -              (46)          -
                                          -------         -------        -------       -------
  Income (loss) before
     provision for income taxes             8,068           1,394          2,792        (2,158)
  Provision for income taxes income          -                -              (75)          -
                                          -------         -------        -------       -------
Net income (loss)                          $8,068          $1,394        $ 2,717       $(2,158)
                                          =======         =======        =======       =======
Other comprehensive income:
   Foreign currency translation
     adjustments                             -               (15)              3            (7)

Comprehensive income (loss)               $8,068          $1,379         $ 2,720       $(2,165)
                                          =======         =======        =======       =======

Basic and diluted net income (loss)
     per share                           $  0.39         $  0.09         $  0.13      $  (0.15)
                                          =======         =======        =======       =======

Basic weighted average common shares
     outstanding                          20,454          14,990          20,272        14,066
                                          =======         =======        =======       =======

Diluted weighted average common shares
     outstanding                          20,454          15,948          20,272        14,066
                                          =======         =======        =======       =======

           See Notes to Condensed Consolidated Financial Statements.
</TABLE>

<PAGE>

                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
                       For the Six Months Ended June 30,
                                 (in thousands)

<TABLE>
<CAPTION>

                                                                  1999          1998
                                                                  ----          ----
<S>                                                              <C>          <C>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

Cash flows from operating activities
    Net income (loss)                                            $2,717       ($2,158)
Adjustments to reconcile net income (loss) to net
 cash provided (used) by operating activities
    Depreciation and amortization:
        Software costs                                            1,142           416
        Property and equipment                                      600           557
        Excess of cost over fair value of net assets acquired     1,096           425
        Other                                                       -               2
Equity in loss of Softworks                                         125           -
Minority interest in net income of subsidiary                        46           -
Provision for doubtful accounts                                     -             239
Common stock and options issued for services                      2,140         2,704
Softworks common stock exchanged for services                     1,729           525
Gain on partial disposition of subsidiary                       (16,441)       (6,627)
Changes in operating assets and liabilities
    Accounts receivable                                          10,843           899
    Installment accounts receivable, due after one year             149        (1,468)
    Inventories                                                      35           -
    Prepaid expenses and other current assets                     1,284          (104)
    Other assets                                                    357          (305)
    Accounts payable and accrued expenses                       (2,584)          (645)
    Current income taxes                                        (2,043)           -
    Deferred income taxes                                          290            -
    Deferred revenue                                            (1,378)         2,266
                                                               -------        -------
        Net cash provided (used) by operating activities           107         (3,274)
                                                               -------        -------
Cash flows from investing activities
    Capital expenditures                                        (1,088)          (868)
    Additional consideration for Softworks acquisition             -             (452)
    Cash received from sale of limited license (see Note 7)        400            -
    Reduction in cash resulting from excluding Softworks
       from consolidation (see Note 8)                          (6,759)           -
    Proceeds from sales of Softworks common stock (see Note 8)  17,406            -
    Proceeds from exercises of options to purchase  Softworks
       common stock (see Note 8)                                   240            -
    Software development and technology purchases                 (190)          (746)
    Repayment of officers loans, net                               155            208
                                                               -------        -------
        Net cash provided (used) by investing activities        10,164         (1,858)
                                                               -------        -------
Cash flows from financing activities
    Net proceeds from sales of common stock and
       exercises of options                                        -            4,682
    Proceeds from issuance of convertible debt
       (net of issuance costs)                                     -            1,925
    Proceeds from long-term debt                                 2,021            500
    Repayments of long-term debt                                (5,065)          (356)
                                                               -------        -------
        Net cash provided (used) by financing activities        (3,044)         6,751
                                                               -------        -------
Effect of exchange rate changes on cash and cash equivalents         3             (7)
                                                               -------        -------
Net increase in cash and cash equivalents                        7,230          1,612

Cash and cash equivalents, beginning of period                   8,176            778
                                                               -------        -------
Cash and cash equivalents, end of period                       $15,406         $2,390
                                                               =======        =======
           See Notes to Condensed Consolidated Financial Statements.

</TABLE>
<PAGE>
                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)
           For the Three and Six Months Ended June 30, 1999 and 1998


1. Interim Financial Information

The condensed  consolidated balance sheet as of June 30, 1999, and the condensed
consolidated  statements  of  operations  and cash  flows  for the three and six
months ended June 30, 1999, and 1998,  have been prepared by the Company without
audit. These interim financial  statements  include all adjustments,  consisting
only of normal recurring  accruals,  which management  considers necessary for a
fair presentation of the financial statements for the above periods. The results
of  operations  for the three months ended June 30,  1999,  are not  necessarily
indicative of results that may be expected for any other interim  periods or for
the full year.

These condensed  consolidated financial statements should be read in conjunction
with the consolidated  financial statements and notes thereto for the year ended
December 31, 1998.  The  accounting  policies  used in preparing  the  condensed
consolidated  financial  statements are consistent  with those  described in the
December 31, 1998, consolidated financial statements.

2. The Company

The most significant  portion of the Company's  operations had historically been
conducted  through  one  of its  subsidiaries,  Softworks,  Inc.  ("Softworks").
Softworks  was wholly  owned by the Company  through  June 29, 1998 and majority
owned through March 31, 1999.  Through a series of transactions that included an
initial  public  offering of  Softworks  in August  1998,  various  exchanges of
Softworks  common stock owned by the Company to  consultants  and  employees for
services  rendered,  a private  placement of Softworks common stock owned by the
Company  in  December  1998 and a  second  public  offering  in June  1999,  the
Company's  ownership  of Softworks  was reduced  from 100% to 38%.  Accordingly,
Softworks is accounted for as a consolidated  subsidiary through March 31, 1999,
and  commencing  April 1, 1999,  Softworks'  results are accounted for using the
equity method of accounting. See Note 8 for further details.

Computer Concepts Corp. and subsidiaries (the "Company") design, develop, market
and support  information  delivery software  products,  including  end-user data
access  tools  for use in  personal  computer  and  client/server  environments.
Through  Softworks,  the  Company  developed,  marketed  and  supported  systems
management  software products for corporate mainframe data centers. In 1997, the
Company  created a business  unit,  "professional  services"  , which  primarily
resells computer hardware and for a fee, will assist in the design, construction
and installation of technology systems. The Company makes use of its proprietary
data  access   technology,   d.b.Express  TM  in  its  d.b.Express  TM  Internet
Information  Server,  more commonly referred to as a "server farm." This service
presently  is being  marketed  solely to the  telecommunications  industry.  The
server  farm  permits  end user the  ability to access and  analyze  information
through  the  internet.  Data can be  visually  presented  using  the  Company=s
patented data visualization technology. Additionally, in June, 1998, the Company
completed an  acquisition  of software (and related sales and marketing  rights)
which is  designed  to provide  non  computer  literate  owners  (e.g.  parents,
guardians,   schools,   etc)  the  ability  to  identify   threats  as  well  as
objectionable  material  which  may be viewed  by users of the  computer  on the
internet (e.g. children).

<PAGE>
                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)
           For the Three and Six Months Ended June 30, 1999 and 1998


3. Shareholders' Equity

During  the six month  period  ended  June 30,  1999,  the  Company  issued  the
following restricted common stock:

i.   As part of a bonus incentive  compensation plan, the Company issued 655,500
     shares (of which  185,000  were issued in the three month period ended June
     30, 1999) to several  non-executive  employees  for which it recorded a non
     cash  charge to earnings of  $990,000  (of which  $164,000  pertains to the
     shares issued during the three month period ended June 30, 1999);

ii.  Issued  660,500  shares (of which  150,000  were  issued in the three month
     period ended June 30, 1999) of its common stock to various  consultants for
     which it recorded a non cash charge to  earnings  of  $1,050,000  (of which
     $140,000  pertains to the shares issued during the three month period ended
     June 30, 1999);


iii. In lieu of cash, in January, 1999, the Company issued 115,000 shares for an
     acquisition  of a technology  license.  The Company  recorded  amortization
     expense of $33,000 during the six months ended June 30, 1999.

4. Legal matters

In March  1995,  an action was  originally  commenced  against the Company and a
number of defendants.  In early 1997,  after a change in counsel,  the plaintiff
amended the  complaint  for a second  time,  now naming as  defendants  only the
Company and three of its officers.  The second  amended  complaint  alleges that
certain  third  parties,  unrelated  to the  Company,  transferred  certificates
representing  1,000,000  shares of the Company's  common stock to the plaintiff.
The  complaint  further  alleges that such shares were  endorsed in blank by the
third  parties  and  became  bearer  securities,  which were  negotiated  to the
plaintiff by physical  delivery.  The certificates had not been legally acquired
from the Company  and the  certificates  were  reported  to the  Securities  and
Exchange  Commission  by the  Company  as  stolen  certificates.  Plaintiff  has
requested  validation of the transfer of the certificates and is seeking damages
of an unspecified  amount,  consisting of alleged  diminution in market value of
the subject shares from 1994 through the date of any judgment in the plaintiff=s
favor. Discovery has been substantially completed and, unless a summary judgment
is granted to one side or the other,  this case is expected to go to trial.  The
Company and its counsel believe that the Company=s  position regarding the claim
has  substantial  factual and legal  support and are  vigorously  defending  the
matter.  However,  the Company is unable to predict the ultimate outcome of this
claim  and,  accordingly,  no  adjustments  have been  made in the  consolidated
financial  statements for any potential  losses or potential  issuance of common
stock.

During  February 1999, the Company and certain  officers  received  notification
that they had been named as defendants in a class action alleging  violations of
certain  securities  laws  with  respect  to  the  content  of  certain  Company
announcements.  The Company and its counsel are vigorously defending the matter.
However,  the  Company is unable to predict the  ultimate  outcome of this claim
and,  accordingly,  no adjustments have been made in the consolidated  financial
statements for any potential losses or potential issuance of common stock.



<PAGE>
                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)
           For the Three and Six Months Ended June 30, 1999 and 1998


5. Reclassifications

Certain reclassifications have been made to the condensed consolidated financial
statements  shown for the prior year in order to have it conform to the  current
year's classifications.

6. Segment information

The Financial  Accounting  Standards Board issued Statement No. 131 "Disclosures
about Segments of an Enterprise and Related Information," which became effective
for the Company in 1998 and has been implemented for all periods presented.  The
Company and its subsidiaries operate in two separate business segments, computer
software  and  professional  services.  The  computer  software  segment,  which
operates  domestically,   is  primarily  engaged  in  the  design,  development,
marketing and support of  information  delivery  software  products and software
products which are designed to provide non computer  literate owners the ability
to identify  threats as well as  objectionable  material  which may be viewed by
users of the  computer on the  internet.  Until March 31, 1999 (see Note 8), the
Company was also engaged in systems  management  software products for corporate
mainframe  data centers.  International  operations  pertaining to these systems
management software products included foreign subsidiaries located in the United
Kingdom,  France,  Brazil,  Australia,  Spain,  Italy and  Germany  and  several
international  distributors  primarily  in  Europe  and Asia.  The  professional
services  segment,  which  operates  domestically,  is primarily  engaged in the
reselling  of  computer  hardware,  design,  construction  and  installation  of
technology  systems, as well as marketing the d.b.Express  Internet  Information
Server, also referred to as a "server farm".

Business information

<TABLE>
<CAPTION>
 (In thousands)                         Three Months Ended                    Six Months Ended
                                        ------------------                    ----------------
                                             June 30,                              June 30,
                                             --------                              --------
                                     1999            1998(a)               1999(b)         1998(a)
                                     ----            -------               -------         -------
<S>                                <C>             <C>                     <C>            <C>
Revenue
     Computer Software             $   228         $  8,900                $10,489        $15,548
     Professional Services           9,417            2,586                 13,124          3,562
                                   -------         --------                -------        -------
           Total                   $ 9,645          $11,486                $23,613        $19,110
                                   =======         ========                =======        =======

Operating Income (loss)
     Computer Software             $(6,604)        $(5,038)               $(14,134)       $(8,260)
     Professional Services             360             341                     640             34
                                   -------         --------                -------        -------
            Total                  $(6,244)        $(4,697)               $(13,494)       $(8,226)
                                   =======         ========                =======        =======

</TABLE>

<TABLE>
<CAPTION>

Identifiable Assets                                           At June 30,1999       At December 31, 1998
                                                              ---------------       --------------------
     <S>                                                          <C>                     <C>
     Computer Software                                            $34,860                 $76,950
     Professional Services                                          8,623                  14,952
                                                                  -------                 -------
             Total                                                $43,483                 $91,902
                                                                  =======                 =======
(a) Includes Softworks for the entire period
(b) Includes Softworks for the three months ended March 31, 1999

</TABLE>
<PAGE>
                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
            For the Three and Six Months Ended June 30, 1999 and 1998


In classifying  business  information  into segments,  the Company  specifically
identifies  revenue,  expenses  and  identifiable  assets  of  the  professional
services segment; items not specifically identified are included in the computer
software segment.

Geographical information:
<TABLE>
<CAPTION>

 (In thousands)                         Three Months Ended                    Six Months Ended
                                        ------------------                    ----------------
                                             June 30,                              June 30,
                                             --------                              --------
                                     1999            1998(a)               1999(b)         1998(a)
                                     ----            -------               -------         -------
<S>                                <C>             <C>                     <C>            <C>
Revenue
   United States                    $9,635          $ 9,444                 $20,378         15,752
   International                        10            2,042                   3,235          3,358
                                   -------         --------                 -------        -------
     Total                           9,645          $11,486                 $23,613        $19,110
                                   =======         ========                 =======        =======

Operating Income/(loss):
   United States                  $(6,254)          $(4,579)               $(14,703)       $(7,529)
   International                       10              (118)                  1,209           (697)
                                   -------         --------                -------        -------
     Total                        $(6,244)          $(4,697)               $(13,494)       $(8,226)
                                   =======         ========                 =======        =======

</TABLE>

<TABLE>
<CAPTION>

Identifiable Assets                                           At June 30,1999       At December 31, 1998
                                                              ---------------       --------------------
     <S>                                                          <C>                     <C>

   United States                                                   $43,483                $ 82,377
   International                                                       -                     9,525
                                                                   -------                --------
     Total                                                         $43,483                $ 91,902
                                                                   =======                ========

(a) Includes  Softworks  for the entire  period
(b) Includes  Softworks  for the three months ended March 31, 1999
</TABLE>

Major customer

For the three  months  ended June 30,  1999 and 1998,  the Company had one major
contract  involving two customers,  with combined revenues of $9,114,000 (94.5%)
of total  revenue) and $2,526 ,000 (22.0%) of total revenue,  respectively.  For
the six months ended June 30, 1999 and 1998,  the Company had one major contract
involving two customers,  with combined revenues of $12,653,000  (53.6% of total
revenue) and $3,079,000  (16.1% of total revenue),  respectively.  These amounts
are included in the Professional Services and Domestic categories.


7. Internet Tracking & Security Ventures, LLC

On June 30, 1998, pursuant to an Asset Purchase and Sale Agreement,  the Company
acquired  certain  software and related sales and marketing rights from Internet
Tracking & Security Ventures,  LLC (AITSV@) in exchange for 1,900,000 restricted
shares of the Company's common stock and 1,000,000  restricted  shares of common
stock of the Company's  then wholly owned  subsidiary,  Softworks.  The acquired
software  program,  known as  AComputerCOP,@  is designed to inform non computer
literate parents,  guardians and alike,  what materials,  or possible threats to


<PAGE>

                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
            For the Three and Six Months Ended June 30, 1999 and 1998


the safety and well being their  children or others have been accessing over the
internet, such as objectionable web sites, text, pictures,  screens,  electronic
mail,  etc. The  Agreement  also  includes the rights to the use of Richard "Bo"
Dietl's name in conjunction  with the promotion and  endorsement of the software
as well as  appearances  by Mr. Dietl in support of the software in regional and
national  marketing  campaigns.  Orders for the  initial  version of the product
began shipping during the fourth quarter,  1998.

The  acquisition  has been valued at an aggregate of  $12,210,000  determined as
follows:  1,900,000  restricted  shares  of the  Company  have  been  valued  at
$5,700,000 and the 1,000,000  restricted  shares of Softworks' common stock have
been valued at  $6,510,000  (based upon the ultimate net proceeds to the selling
shareholders in Softworks' initial public offering which became effective August
4, 1998). The $12,210,000 purchase price has been allocated to the fair value of
the assets  acquired at June 30, 1998,  based upon a written  valuation  from an
independent investment-banking firm. Accordingly,  $2,700,000 has been allocated
to "Software costs", $4,150,000 has been recorded as "Prepaid expenses and other
current  assets" and  $5,360,000  has been recorded as "Excess of cost over fair
value of net assets acquired".

In March,  1999,  the Company sold certain  rights to license  ComputerCOP  to a
marketing company (Bo-Tel, Inc.) for $400,000. The license rights are limited to
granting a specified original  equipment  manufacturer of personal computers the
right to embed the  software in its  computers  for sale to the general  public.
Bo-Tel,  Inc.  is an  affiliate  of ITSV,  and  accordingly,  this sale has been
accounted for as a reduction of the cost of the assets  acquired from ITSV.

The software  costs will be amortized  using the greater of the ratio of current
revenue to the total  projected  revenue for the  software or the  straight-line
method using an estimated useful life of 30 months. The prepaid expenses will be
expensed as the related services are performed  (including,  but not limited to,
appearances,  promotion and endorsement).  The excess of cost over fair value of
net assets  acquired,  which primarily  relate to the use of the name "Bo Dietl"
will be amortized using the straight-line  method over 36 months.  However, as a
product that the Company has only recently commenced marketing, it is reasonably
possible that the estimates of anticipated  future gross revenue,  the remaining
economic life of the product, or both will be reduced  significantly in the near
term  due to  the  unpredictability  of  the  product's  market  acceptance  and
competitive pressures (including technological  obsolescence).  As a result, the
carrying  amount of the assets acquired from ITSV  (approximately  $5,850,000 at
June 30, 1999) may be reduced materially in the near term.

8. GAIN ON PARTIAL DISPOSITION OF SUBSIDIARY

Prior to June 30, 1998,  Softworks was a wholly owned  subsidiary of the Company
with 14,083,000 shares of common stock outstanding. On August 4, 1998, Softworks
completed a public  offering of 4,200,000  shares of its common stock at a price
of $7.00 per share (less  underwriting  fees and commissions of $0.49 per share)
as follows:  1,700,000 shares of common stock were sold by Softworks;  1,000,000
shares  were  sold  by ITSV  and  1,500,000  shares  were  sold by the  Company.
Softworks  common stock is traded on the NASDAQ National Market under the symbol
"SWRX."

In addition to the public  offering  discussed  above, in 1998, the Company sold
1,000,000  shares of Softworks  common stock for $5,000,000 (sold December 1998,
cash received  first quarter 1999) and exchanged  1,877,700  shares of Softworks
common  stock to  employees  and  consultants  for  services  rendered  or to be
rendered. As a result of the various transactions described above, the Company's
ownership  interest in  Softworks  was reduced from 100% to 54.5% as of December
31, 1998.

In January, 1999, the Company, through the exchange of 687,600 restricted shares
of Softworks common stock,  further reduced its ownership interest from 54.5% to
50.2% as follows:
<PAGE>


                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
            For the Three and Six Months Ended June 30, 1999 and 1998


1.   The Company issued as 1999 bonus incentive compensation, 298,000 restricted
     shares of Softworks common stock to two executives,  vesting 25% on January
     1,  1999,  25% on April 1,  1999,  25% on July 1,  1999 and 25% on  October
     1,1999.  These shares would fully vest in the event of the  acquisition  of
     Softworks, or the Company by any third party. Accordingly, the Company will
     record a non-cash charge to operations of $269,250 each quarter.

2.   The Company  issued  389,600  restricted  shares of  Softworks,  as well as
     80,000 contract options to acquire  restricted  shares of Softworks' common
     stock  owned by the  Company,  exercisable  at $1.00 per  share and  expire
     December  31, 1999 to various  consultants  (40,000 of these  options  were
     exercised  in June,  1999).  The related  contracts  are for services to be
     performed over time frames ranging from twelve to twenty-four  months.  The
     $1,774,000  value of the shares and options  will be charged to  operations
     over the terms of the related contracts.

As a result of the January,  1999  transactions,  the Company  recognized in the
first quarter a gain of $2,031,000, representing the difference between the fair
value of the Softworks common stock exchanged, and the related carrying value of
the Company's  investment in Softworks.

In April,  1999,  certain stock options  previously  granted by Softworks to its
employees and consultants  were exercised,  which had the effect of reducing the
Company's  ownership  interest in Softworks  from 50.2% to 49.7%.  In June 1999,
Softworks  completed a second public offering of 3,900,000  shares of its common
stock at a price of $10.50 per share (less  underwriting fees and commissions of
$.63 per share) as follows:  1,000,000 shares were sold by Softworks,  1,256,933
shares  were  sold by the  Company,  and  1,643,067  shares  were  sold by other
existing  shareholders.  In  conjunction  with the offering,  the Company issued
200,000 contract options to acquire  restricted shares of Softworks common stock
owned by the  Company to a  consultant,  exercisable  at $1.00 per share,  which
vested upon completion of the offering. The options were exercised in June 1999.
The result of these  transactions was to further reduce the Company's  ownership
of Softworks to 38.0% or 6,505,767  shares of Softworks common stock at June 30,
1999.  The Company  recognized a gain of  $14,410,000  in the second  quarter of
1999.

Commencing April 1, 1999,  Softworks' results are accounted for using the equity
method of accounting and are no longer consolidated.  Under the equity method of
accounting,  the Company's share of Softworks' earnings or losses is included in
the Company's  consolidated  operating results in a single line item. Summarized
financial  information  of Softworks for the quarter ended June 30, 1999 as well
as pro forma consolidated  financial  information as if Softworks were accounted
for using the equity method for all prior periods presented is as follows:


                                 Softworks, Inc.
                        Summarized Financial Information

<TABLE>
<CAPTION>

     Condensed Statement of Operations                Condensed Balance Sheet
     Three months ended June 30, 1999                   June 30, 1999
            (in thousands)                              (in thousands)

<S>                      <C>            <S>                      <C>
Revenue                  $11,615        Current assets           $44,349
Cost of revenue              730        Non-current assets        22,062
                         -------                                 -------
Gross margin              10,885                                 $66,411
                                                                 =======
Operating expenses        11,303
                         -------
Operating loss             (418)
                         -------
Net loss                  ($288)
                         =======
                                        Current liabilities      $23,641
                                        Non-current liabilities   14,071
                                        Stockholders' equity      28,699
                                                                 -------
                                                                 $66,411
                                                                 =======
</TABLE>
<PAGE>


                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
            For the Three and Six Months Ended June 30, 1999 and 1998

                    Computer Concepts Corp. and Subsidiaries
                 Pro Forma Condensed Consolidated Balance Sheet

<TABLE>
<CAPTION>
                                         December 31, 1998
                         ---------------------------------------------------
                                          (in thousands)

                                   Pro-forma
                         Actual    Adjustments    Pro-forma                             Actual         Adjustment     Pro-forma
                         ------    -----------    ---------                             ------         ----------     ---------
ASSETS                                                           LIABILITIES AND
                                                                 SHAREHOLDERS'
                                                                 EQUITY

<S>                    <C>         <C>            <C>            <S>                    <C>             <C>             <C>
Current Assets         $ 63,742    $ (38,282)     $ 25,460       Current liabilities   $36,173         $(26,501)      $ 9,672
Long-term receivables     7,908       (7,908)          -         Deferred revenue       11,807          (11,764)           43
Property, plant and
  equipment, net          3,564       (2,499)        1,065       Long-term debt          1,403           (1,401)            2
Software costs, net       5,594       (3,039)        2,555                              ------          --------        -----
                                                                 Total liabilities      49,383          (39,666)        9,717
Goodwill, net             8,610       (4,143)        4,467

Other assets              2,484       (2,384)          100       Minority Interest       8,503           (8,503)          -

Investment in
  subsidiary, equity
  method                    -         10,086                     Shareholders' equity   34,016              -          34,016
                       --------     --------      --------                             -------           --------     -------
                                                    10,086
                                                  --------
                       $ 91,902     $(48,169)     $ 43,733                             $91,902           $(48,169)    $43,733
                       ========     ========      ========                             =======           ========      ======
</TABLE>

<TABLE>
<CAPTION>
                                         Computer Concepts Corp. and Subsidiaries
                                Pro Forma Condensed Consolidated Statements of Operations

                         For the six months ended June 30, 1999        For the six  months ended June 30, 1998
                         --------------------------------------        ---------------------------------------
                                   (in thousands)                                      (in thousands)

                                       Pro-forma                                     Pro-forma
                         Actual       Adjustments      Pro-forma       Actual       Adjustments       Pro-forma
                         ------       -----------      ---------       ------       -----------       ---------
<S>                      <C>           <C>             <C>            <C>            <C>                <C>
Revenue                  $23,613       $(10,258)       $13,355        $19,110        $(15,649)          $ 3,461
Cost of Revenue           12,641           (764)        11,877          7,495          (4,310)            3,185
                         -------       --------        -------        -------        --------           -------
Gross Margin              10,972         (9,494)         1,478         11,615         (11,339)              276
                         -------       --------        -------        -------        --------           -------
Total Operating Expenses  24,466         (9,342)        15,124         19,841         (11,930)            7,911
                         -------       --------        -------        -------        --------           -------
 Operating (loss)
    income               (13,494)          (152)       (13,646)        (8,226)            591            (7,635)
Other Income (expense)
   Gain on partial
     disposition of
     subsidiary           16,441           -            16,441          6,627             -               6,627
   Interest (expense)
     income, net              16           -                16           (559)            247              (312)
   Minority interest
     expense                 (46)           46             -              -               -                 -
   Equity in loss of
     Softworks              (125)           46             (79)           -              (838)             (838)
                         -------       --------        -------        -------        --------           -------
Income (loss) before
   provision for
   income taxes            2,792           (60)          2,732        (2,158)             -              (2,158)
                         -------       --------        -------        -------        --------           -------
Provision for
   income taxes              (75)           60             (15)          -                -                 -
                         -------       --------        -------        -------        --------           -------
Net income (loss)         $2,717       $    -           $2,717       $(2,158)         $   -             $(2,158)
                         =======       ========        =======        =======        ========           =======
</TABLE>
<PAGE>


                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
            For the Three and Six Months Ended June 30, 1999 and 1998


                    Computer Concepts Corp. and Subsidiaries
            Pro Forma Condensed Consolidated Statements of Operations
                    For the three months ended June 30, 1998
                                 (in thousands)

<TABLE>
<CAPTION>

                                      Actual    Pro-forma Adjustments    Pro-forma
                                      ------    ---------------------    ---------
<S>                                  <C>               <C>                 <C>
Revenue                              $11,486           $(9,053)            $2,433
Cost of Revenue                        4,003            (2,000)             2,003
                                     -------           -------            -------
Gross Margin                           7,483            (7,053)               430
Total Operating Expenses              12,180            (6,858)             5,322
                                     -------           -------            -------
  Operating (loss) income             (4,697)             (195)            (4,892)
                                     -------           -------            -------
Other Income (expense)
  Gain on partial disposition
     of subsidiary                     6,627               -                6,627
  Interest (expense) income,
     net                                (536)              200               (336)
  Minority interest expense              -                 -                  -
                                     -------           -------            -------
  Equity in loss of Softworks            -                  (5)                (5)
                                     -------           -------            -------
Income before provision
   for income taxes                    1,394               -                1,394
Provision for income taxes               -                 -                  -
                                     -------           -------            -------
Net income                            $1,394          $    -               $1,394
                                     =======           =======            =======
</TABLE>

9. Income Taxes

The Company  accounts for income taxes under  Statement of Financial  Accounting
Standards No. 109, AAccounting for Income Taxes" (ASFAS 109"). SFAS 109 requires
the   determination  of  deferred  tax  assets  and  liabilities  based  on  the
differences  between the financial  statement and income tax bases of assets and
liabilities,  using enacted tax rates SFAS No.109 requires that the net deferred
tax asset be  adjusted  by a  valuation  allowance,  if,  based on the weight of
available  evidence,  it is more likely than not that some portion or all of the
net deferred tax asset will not be realized.

<PAGE>


                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
            For the Three and Six Months Ended June 30, 1999 and 1998





Through August 4,1998,  the results of the Company's U.S.  operations  conducted
through  its   Softworks   subsidiary   have  been  included  in  the  Company's
consolidated Federal income tax returns. However, separate provisions for income
taxes have been determined for Softworks= wholly owned foreign subsidiaries that
are not eligible to be included in the U.S.  Federal  income tax  returns.  As a
result of the initial public offering of Softworks,  the Company's  ownership of
Softworks  was  reduced  below 80% and  Softworks  is no longer  eligible  to be
included  in the  Company's  consolidated  Federal  income  tax  returns.

It is expected  that the Company  will  utilize a portion of its  available  net
operating  loss  carryforwards  to  substantially   reduce  the  taxable  income
resulting from the gain on partial disposition of Softworks.

10. Management's plans

Prior to 1998, the Company incurred substantial consolidated net losses and used
substantial  amounts  of cash in  operating  activities,  which  were  primarily
financed through private placements of common stock and convertible  debentures.
During 1998, and 1999, the Company continued to use substantial  amounts of cash
in its operations,  however,  cash requirements were primarily  financed through
Softworks  initial  public  offering and  additional  sales of Softworks  common
stock. Management's current plan is focused on becoming a preeminent provider of
innovative software products and services which are, and continue to be designed
and developed to:

                --        break down barriers between people and data;
                --        exploit the Company's patented technologies;
                --        capitalize on the internet marketplace.

The Company is currently focusing on four general product categories:

1.   The continued  marketing of the  d.b.Express  Internet  Information  Server
     Services;

2.   Continue to exploit the d.b.Express  technology  through the development of
     new vertical markets;

3.   Continue to develop its Professional Services division; and

4.   Capitalize on the growth of the internet and parents' need to monitor their
     children's activities through the sale of ComputerCOP.

Additionally,  the  Company  is  currently  reviewing  its  long-term  business
strategy.

While management  believes that its plan will ultimately  enable them to achieve
positive cash flows from  operations,  until such time,  additional  cash may be
necessary  to  implement  such  plan.  Although  there  can  be  no  assurances,
management has several  alternative sources to fund the development of its plan,
including  additional debt and equity  financing (if  necessary),  or additional
sales of its investment in Softworks  common stock,  which,  as a consequence of
Softworks initial public offering,  became a readily marketable asset (See Note
8).16


<PAGE>

                    COMPUTER CONCEPTS CORP AND SUBSIDIARIES
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                       FINANCIAL CONDITION AND LIQUIDITY

               For the Three Months Ended March 31, 1999 and 1998


Forward-Looking Statements.
--------------------------

All statements  other than  statements of historical  fact included in this Form
10-Q including,  without limitation,  statements under, "Management's Discussion
and Analysis of Financial  Condition  and Results of  Operations"  regarding the
Companys financial  position,  business strategy and the plans and objectives of
management for future operations, are forward-looking  statements.  When used in
these Form 10-Q, words such as "anticipate,"  "believe,"  "estimate,"  "expect,"
"intend"  and  similar  expressions,  as  they  relate  to  the  Company  or its
management, identify forward-looking statements. Such forward-looking statements
are based on the  beliefs of  management,  as well as  assumptions  made by, and
information  currently  available to, the Companys  management.  Actual  results
could  differ  materially  from  those   contemplated  by  the   forward-looking
statements  as a  result  of  certain  factors  including  but not  limited  to,
fluctuations in future operating results, technological changes or difficulties,
management of future growth, expansion of international operations,  the risk of
errors or failures in the Companys software products,  dependence on proprietary
technology,  competitive factors, risks associated with potential  acquisitions,
the ability to recruit  personnel,  and the  dependence on key  personnel.  Such
statements reflect the current views of management with respect to future events
and are subject to these and other risks, uncertainties and assumptions relating
to the operations,  results of operations,  growth strategy and liquidity of the
Company. All subsequent written and oral forward-looking statements attributable
to the Company or persons acting on its behalf are expressly  qualified in their
entirety by this paragraph.

Overview
--------

Computer Concepts Corp. and subsidiaries (the "Company") design, develop, market
and support  information  delivery software  products,  including  end-user data
access  tools  for use in  personal  computer  and  client/server  environments.
Through  Softworks,  the  Company  developed,  marketed  and  supported  systems
management  software products for corporate mainframe data centers. In 1997, the
Company  created a  business  unit,  "professional  services,"  which  primarily
resells computer hardware and for a fee, will assist in the design, construction
and installation of technology systems. The Company makes use of its proprietary
data  access   technology,   d.b.Express  TM  in  its  d.b.Express  TM  Internet
Information  Server,  more commonly  referred to as a server farm.  This service
presently  is being  marketed  solely to the  telecommunications  industry.  The
server  farm  permits  end user the  ability to access and  analyze  information
through the internet. Data can be visually presented using the Companys patented
data  visualization  technology.   Additionally,  in  June,  1998,  the  Company
completed an  acquisition  of software (and related sales and marketing  rights)
which is  designed  to provide  non  computer  literate  owners  (e.g.  parents,
guardians,   schools,   etc)  the  ability  to  identify   threats  as  well  as
objectionable  material  which  may be viewed  by users of the  computer  on the
internet (e.g. children).

The Company currently  consists of three product lines:  professional  services,
d.b.Express TM Internet  Information Server services (reported with professional
services in the accompanying financial statements),  and software technology and
related  sales  and  marketing  rights,  acquired  in June,  1998  (marketed  as
ComputerCOP).  d.b.Express TM technology, a visually-based  proprietary software
tool, can provide  businesses with a simple,  fast,  low-cost method of finding,
organizing, analyzing and using information contained in databases. During 1997,
the  Company  commenced  operations  of  the  professional  services  unit.  The
professional  services unit offers  solutions,  support and  strategies to solve
various  business crises in such areas as:  selection and reselling of hardware,
network determination, help desk applications,  wiring/cabling, LAN connections,
moves/adds/changes,  and  project  management.  Additionally,  this  unit  could
oversee  new  installations  as  well  as  offering  on-site  component  repair.
ComputerCOP is designed to provide non computer  literate owners (e.g.  parents)
the ability to identify threats as well as  objectionable  material which may be
viewed by users of the computer on the internet (e.g. children).  Orders for the
initial version of the product began shipping  during the fourth quarter,  1998.
The method of revenue  recognition  for each product line is dependent  upon the
type and manner of service provided and or the terms of product sales.

<PAGE>
                    COMPUTER CONCEPTS CORP AND SUBSIDIARIES
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                       FINANCIAL CONDITION AND LIQUIDITY

               For the Three Months Ended March 31, 1999 and 1998


As described  above in Note 8, during the three months ended June 30, 1999,  the
Companys ownership interest in Softworks was reduced to 38.0%. Accordingly,  the
financial results of Softworks are not consolidated with the Company  commencing
with the quarter ending June 30, 1999.

Results of Operations
---------------------

Commencing April 1, 1999,  Softworks  results are accounted for using the equity
method of accounting and are no longer consolidated.  Under the equity method of
accounting,  the Company's share of Softworks  earnings or losses is included in
the Company's  consolidated  operating results in a single line item. Summarized
financial information of consolidated operating results with Softworks accounted
for using the equity method for the three and six months ended June 30, 1999 and
1998 is as follows:

                    Computer Concepts Corp. and Subsidiaries
      Actual and Pro Forma Condensed Consolidated Statements of Operations


<TABLE>
<CAPTION>
                         For the three months ended June 30,         For the six  months ended June 30,
                         -----------------------------------         ----------------------------------
                                   (in thousands)                             (in thousands)

                                 1999           1998                          1999           1998
                                 ----           ----                          ----           ----
                               (Actual)      (Pro-forma)                   (Pro-forma)    (Pro-forma)
                               -------       ----------                    -----------    -----------
<S>                            <C>            <C>                          <C>             <C>
Revenue
     Software licenses, net    $  218          $    8                        $    211        $    27
     Maintenance                   10              10                              20             20
     Professional services      9,417           2,415                          13,124          3,414
                               ------          ------                        --------        -------
                                9,645           2,433                          13,355          3,461
Cost of Revenue
     Software licenses             42               1                              61              4
     Maintenance                  -               -                               -              -
     Professional services      8,573           2,002                          11,816          3,181
                               ------          ------                        --------        -------
     Gross margin               1,030             430                           1,478            276
                               ------          ------                        --------        -------

Research and development costs    942             815                           2,510          1,526
Sales and marketing costs       3,611           3,030                           7,194          3,831
General and administrative
     costs                      1,726           1,331                           3,451          2,332
Amortization and depreciation     995             146                           1,969            222
                               ------          ------                        --------        -------
                                7,274           5,322                          15,124          7,911
                               ------          ------                        --------        -------
    Operating loss             (6,244)         (4,892)                        (13,646)        (7,635)

Gain on partial disposition
    of subsidiary (see Note 8) 14,410           6,627                          16,441          6,627
Other expense, net                (98)           (341)                            (78)        (1,150)
                               ------          ------                        --------        -------
Net income (loss)              $8,068          $1,394                         $ 2,717        ($2,158)
                               ======          ======                        ========        =======
</TABLE>

<PAGE>

                    COMPUTER CONCEPTS CORP AND SUBSIDIARIES
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                       FINANCIAL CONDITION AND LIQUIDITY

               For the Three Months Ended March 31, 1999 and 1998

The  following  discussion  about  the "results of operations"  is based on the
operating  results as presented in the above table.

Total  revenue  for the three and  six-month  periods  ended June 30,  1999 when
compared  to the same time frames in the prior year,  increased  $7,212,000  and
$9,894,000,  respectively.  The significant portion of the professional services
revenue has been derived from one major contract involving two customers for the
resale of computer  hardware and related  services (see Note 6- Major customer),
which is substantially  complete.  The Company is currently pursuing  additional
contracts,  however,  there  can be no  assurances  that  the  Company  will  be
successful  in  obtaining  these  contracts.  The  remaining  portion of revenue
included in  professional  services is generated from the Company's  d.b.Express
Internet  Information Server,  (the "server farm"). At present,  this technology
has only been developed to provide service to the  telecommunications  industry.
The  Company is  currently  negotiating/finalizing  contracts  with  several new
customers,   which  if  consummated,   should  increase  the  monthly   revenue.
Substantially  all of the revenue in the software  license  category  relates to
ComputerCOP.  The Company began shipping ComputerCOP in the last quarter of 1998
and has shipped in excess if 100,000 copies of the product to various retailers,
distributors and individuals to date.  However,  since most of the shipments are
made with right of return,  the Company has delayed the  recognition  of revenue
until the  requirements of Statement of Financial  Accounting  Standards No. 48,
Revenue  Recognition  When Right of Return  Exists  have been met.  The  Company
anticipates  releasing  ComputerCOP Deluxe,  which is a new version with several
new features and  enhancements,  primarily  designed for  individual  consumers.
Further,  the  Company  also  plans to  release  two  completely  new  versions,
ComputerCOP Professional and ComputerCOP Forensic, for which orders have already
been received.  ComputerCOP  Professional and ComputerCOP Forensic are primarily
designed for law enforcement professionals,  such as police departments,  parole
officers and other government  agencies.  The Company anticipates the release of
these three products in the next several months.

The cost of revenue for professional  services,  as a percentage of its revenue,
increased  from 83% for the quarter  ended June 30, 1998, to 91% for the quarter
ended June 30, 1999,  and  decreased  from 93% for the six months ended June 30,
1998 to 90% for the six months ended June 30, 1999. The cost of revenue consists
primarily  of amounts  paid to the  Companys  suppliers  for goods and  services
related  to  the  resale  of  computer  hardware  and  related  services  in its
professional  services  unit.  The cost of revenue  related  to the server  farm
primarily  consists of the direct labor  associated  with processing call detail
records.  The  depreciation  of  the  server  farm's  hardware  is  included  in
"Amortization and depreciation."  Cost of revenue with respect to ComputerCOP is
currently  running at  approximately  20%.  The  Company  expects to improve its
margins as volume increases.  Further,  the Company  anticipates that based upon
the expected selling price of ComputerCOP Professional and ComputerCOP Forensic,
gross margins should improve.  The amortization  costs of the purchased software
technology   related  to   ComputerCOP   are  included  in   "Amortization   and
depreciation."

Research and development  costs for the three-month  period ended June 30, 1999,
increased  approximately  $127,000 over the comparable period last year. For the
six months ended June 30, 1999,  costs  increased  $984,000 when compared to the
six months  ended June 30,  1998.  These  increases  were  primarily a result of
enhancements,  upgrades and the development of additional vertical  applications
to the d.b.Express  Internet  Information  Server, and the three new versions of
ComputerCOP.  Further,  expenditures  have  been  made  by  the  Company  in its
continuing efforts to create and bring to market new technologies.

<PAGE>

                    COMPUTER CONCEPTS CORP AND SUBSIDIARIES
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                       FINANCIAL CONDITION AND LIQUIDITY

               For the Three Months Ended March 31, 1999 and 1998

Sales and marketing  expenses  increased  $581,000 to  $3,611,000  for the three
month period  ended June 30,  1999,  when  compared to  $3,030,000  for the same
period in the prior year and  increased  $3,363,000  to  $7,194,000  for the six
month period  ended June 30,  1999,  when  compared to  $3,831,000  for the same
period in the prior year. A major  portion of sales and  marketing  costs is the
non-cash  charge  related  to the  specific  marketing  rights  obtained  in the
acquisition  of ComputerCOP of  approximately  $2,074,000  during the six months
ended June 30, 1999.  The Company will  continue to recognize  costs  associated
with these  specific  marketing  rights as the related  services are  performed,
which is expected to approximate  $1,037,000 for each quarter  through 1999. The
Company has  expended an  additional  $500,000  marketing  ComputerCOP  (none in
1998).  The  Company  has also  incurred  approximately  $425,000  of sales  and
commission  expenses  related to the resale of  computer  hardware  and  related
services in its professional services division  (approximately $50,000 in 1998).
The balance of the sales and marketing costs relate to the Company's server farm
(in the  telecommunications  industry as well as exploring  new vertical  market
applications) and marketing  research for products and services  currently under
development. While sales and marketing expenses have risen, the Company believes
that its  expenditures  are  necessary in order to maintain  and improve  market
position and product recognition.

General and administrative  costs increased $395,000 to $1,726,000 for the three
months  ended June 30,  1999,  when  compared to the three months ended June 30,
1998,  and increased  $1,119,000 to $3,451,000 for the six months ended June 30,
1999,  when  compared  to the six months  ended  June 30,  1998.  Major  factors
contributing to these increases are expanded staffing levels,  which the Company
believes necessary in order to support  anticipated  growth,  legal expenses the
Company has  incurred in defending  itself from the class  action law suit,  and
non-cash executive compensation.

Amortization and  depreciation  expenses  increased  $849,000 when comparing the
three-month periods ended June 30, 1999 and June 30, 1998. Further, it increased
$1,747,000 when comparing the six-month periods ended June 30, 1999 and June 30,
1998.  The increases are primarily  attributable  to the purchased  software and
goodwill acquired in the transaction effective June 30, 1998 (see Note 7).

Gain on partial disposition of subsidiary - see Note 8.

Liquidity and Capital Resources
-------------------------------

For the  six-month  period ended June 30, 1999,  net cash  provided by operating
activities was $107,000,  $75,000 of which was  attributable  to Softworks.  The
Company  had  one  major   contract   involving  two  customers   that  provided
approximately  $5,000,000 net cash for the six-month period ended June 30, 1999,
primarily as a result of timing  differences  between  accounts  receivable  and
accounts  payable.  The  Company is  currently  pursuing  additional  contracts,
however,  there can be no  assurances  that the Company  will be  successful  in
obtaining these contracts.

Net cash provided by investing activities of $10,164,000  ($10,616,000 excluding
Softworks)  was primarily  attributable  to the proceeds from sales of Softworks
common stock and the  exercises of options to purchase  Softworks  common stock,
totaling $17,646,000 offset by the reduction in cash of $6,759,000  attributable
to excluding Softworks from consolidation (see Note 8).

During  November,  1998, the parent Company entered into an Accounts  Receivable
Purchase  Agreement,  whereby  the  Company  from  time to time  may,  on a full
recourse basis, assign some of their accounts receivable.  Upon specific invoice
approval,  an advance of 85% of the  underlying  receivable  is  provided to the
Company.   The  remaining  balance  (15%),   less  an   administrative   fee  of
approximately  2% plus interest at the rate of 1 1/2% per month,  is paid to the
Company once the customer has paid.  This agreement  expires in November,  1999.
During the first quarter of 1999, the Company repaid  $4,172,000 of related debt
and at June 30, 1999,  there were no receivables  assigned or any amount due the
lender.

Prior to 1998, the Company incurred substantial consolidated net losses and used
substantial  amounts  of cash in  operating  activities,  which  were  primarily
financed through private placements of common stock and convertible  debentures.
During 1998, and 1999, the Company continued to use substantial  amounts of cash
in its operations,  however,  cash requirements were primarily  financed through
Softworks  initial  public  offering and  additional  sales of Softworks  common
stock.  At June 30,  1999,  and  December 31, 1998  (excluding  Softworks),  the
Company  had  working   capital  of  $21,425,000   (unaudited)  and  $15,787,000
(unaudited),  respectively. As of August 10, 1999, the Company had cash and cash
equivalents totaling approximately $15,980,000 (unaudited).

<PAGE>

                    COMPUTER CONCEPTS CORP AND SUBSIDIARIES
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                       FINANCIAL CONDITION AND LIQUIDITY

               For the Three Months Ended March 31, 1999 and 1998


Management's  current  plan is focused  on  becoming a  preeminent  provider  of
innovative software products and services which are, and continue to be designed
and developed to:

     --  break down barriers between people and data;
     --  exploit  the  Companys  patented  technologies;
     --  capitalize  on the internet  marketplace.

The Company is currently focusing on four general categories:

1.   The continued  marketing of the  d.b.Express  Internet  Information  Server
     Services;

2.   Continue to exploit the d.b.Express  technology  through the development of
     new vertical markets;

3.   Continue to develop its Professional Services division; and

4.   Capitalize  on the growth of the internet and parents need to monitor their
     childrens activities through the sale of ComputerCOP.

Additionally,   the  Company  is  currently  reviewing  its  long-term  business
strategy.

While management  believes that its plan will ultimately  enable them to achieve
positive cash flows from  operations,  until such time,  additional  cash may be
necessary  to  implement  such  plan.  Although  there  can  be  no  assurances,
management has several  alternative sources to fund the development of its plan,
including  additional debt and equity  financing (if  necessary),  or additional
sales of its investment in Softworks  common stock,  which,  as a consequence of
Softworks initial public offering,  became a readily marketable asset (See Note
8).

YEAR 2000 ISSUES

Background.  Some computers,  software,  and other equipment include programming
code in which calendar year data is abbreviated to only two digits.  As a result
of this design decision,  some of these systems could fail to operate or fail to
produce correct  results if "00" is interpreted to mean 1900,  rather than 2000.
These problems are widely  expected to increase in frequency and severity as the
year 2000  approaches,  and are commonly  referred to as the  Millennium  Bug or
"Year 2000 Problem".

Assessment.  The Year 2000 Problem could affect computers,  software,  and other
equipment used, operated, or maintained by the Company. Accordingly, the Company
is  reviewing  its  internal  computer  programs  and systems to ensure that the
programs and systems will be Year 2000 compliant. The Company presently believes
that its  computer  systems  will be Year  2000  compliant  in a timely  manner.
However,  while  the  estimated  cost of these  efforts  is not  expected  to be
material to the Company's overall financial  position,  or any year's results of
operations, there can be no assurance to this effect.

Software  Sold to  Consumers.  The Company  believes  that it has  substantially
identified  and  resolved  all  potential  Year  2000  Problems  with any of the
software  products it develops and markets.  However,  management  also believes
that it is not possible to determine with complete  certainty that all Year 2000
Problems  affecting the  Company's  software  products  have been  identified or
corrected due to complexity of these  products and the fact that these  products
interact with other third party vendor products and operate on computer  systems
which are not under the Company's control.

<PAGE>

                    COMPUTER CONCEPTS CORP AND SUBSIDIARIES
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                       FINANCIAL CONDITION AND LIQUIDITY

               For the Three Months Ended March 31, 1999 and 1998


Internal   Infrastructure.   The  Company   believes  that  it  has   identified
substantially  all of the major computers,  software  applications,  and related
equipment used in connection with its internal operations that must be modified,
upgraded,  or replaced to minimize the  possibility of a material  disruption to
its business. The Company has commenced the process of modifying, upgrading, and
replacing  major systems that have been  identified as adversely  affected,  and
expects to complete this process before the end of September, 1999.

Systems Other than Information  Technology Systems. In addition to computers and
related systems, the operation of office and facilities  equipment,  such as fax
machines,  photocopiers,  telephone switches,  security systems,  elevators, and
other common  devices may be affected by the Year 2000  Problem.  The Company is
currently  assessing the potential  effect of, and costs of remediating the Year
2000 Problem on its office and facilities equipment and expects to complete such
assessment by the September,  1999. The Company  estimates the total cost to the
Company of completing any required  modifications,  upgrades, or replacements of
these internal  systems will not have a material adverse effect on the Company's
business or results of operations.  This estimate is being monitored and will be
revised as additional information becomes available.

Suppliers.  The Company has initiated  communications,  including surveys,  with
third party  suppliers of the major  computers,  software,  and other  equipment
used,  operated,  or  maintained  by the Company to identify  and, to the extent
possible,  to resolve  issues  involving  the Year 2000  Problem.  However,  the
Company  has  limited or no control  over  responses  to its  inquiries  and the
actions  of these  third  party  suppliers.  Thus,  while the  Company  does not
anticipate any significant  Year 2000 Problems with these systems,  there can be
no  assurance  that these  suppliers  will resolve any or all of their Year 2000
Problems with these systems  before the  occurrence of a material  disruption to
the business of the Company or any of its customers.  Any failure of these third
parties to resolve  Year 2000  problems  with their  systems in a timely  manner
could  have a  material  adverse  effect on the  Company's  business,  financial
condition, and results of operations.

Most Likely Consequences of Year 2000 Problems.  The Company expects to identify
and resolve all Year 2000 Problems that could  materially  adversely  affect its
business  operations.  However,  management  believes that it is not possible to
determine  with complete  certainty  that all Year 2000  Problems  affecting the
Company have been  identified or corrected.  The number of devices that could be
affected and the  interactions  among these devices are simply too numerous.  In
addition,  one  cannot  accurately  predict  how many Year 2000  Problem-related
failures  will occur or the severity,  duration,  or financial  consequences  of
these perhaps  inevitable  failures.  As a result,  management  expects that the
Company could likely suffer the following:

1.   a significant  number of operational  inconveniences and inefficiencies for
     the  Company  and its  customers  that  may  divert  management's  time and
     attention  and  financial and human  resources  from its ordinary  business
     activities; and

2.   a lesser number of serious  system  failures  that may require  significant
     efforts by the Company or its  customers to prevent or  alleviate  material
     business disruptions; and

3.   the  inability to determine  with any degree of  certainty,  the changes if
     any, in buying habits of its current and  potential  customers due to their
     concerns over Year 2000 issues.

Contingency Plans. The Company is currently  developing  contingency plans to be
implemented  as part of its efforts to identify and correct  Year 2000  Problems
affecting its internal systems.  The Company expects to complete its contingency
plans by the end of September,  1999.  Depending on the systems affected,  these
plans could include  accelerated  replacement of affected equipment or software,
short to medium-term use of backup equipment and software,  increased work hours
for Company personnel or use of contract  personnel to correct on an accelerated
schedule any Year 2000 Problems that arise or to provide manual  workarounds for
information  systems,  and  similar  approaches.  If the  Company is required to
implement  any of these  contingency  plans,  it could have a  material  adverse
effect on the Company's financial condition and results of operations.

<PAGE>

                    COMPUTER CONCEPTS CORP AND SUBSIDIARIES
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                       FINANCIAL CONDITION AND LIQUIDITY

               For the Three Months Ended March 31, 1999 and 1998


Disclaimer.   The  discussion  of  the  Company's   efforts,   and  management's
expectations,  relating to Year 2000 compliance are forward-looking  statements.
The  Company's  ability  to  achieve  Year  2000  compliance  and the  level  of
incremental costs associated  therewith,  could be adversely  impacted by, among
other things,  the availability  and cost of programming and testing  resources,
vendors' ability to modify  proprietary  software,  and  unanticipated  problems
identified in the ongoing compliance review.


<PAGE>

                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                          PART II - OTHER INFORMATION
           For the Three and Six Months Ended June 30, 1999 and 1998


Item 1.  Legal Proceedings

         Not applicable.

Item 2.  Changes in Securities

         Not applicable.

Item 3.  Defaults Upon Senior Securities

         Not applicable.

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

         Not applicable.

Item 5.  Other Information

         Not applicable.

Item 6. Exhibits and Reports on Form 8-K

        Not applicable.


<PAGE>


                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                          PART II - OTHER INFORMATION
           For the Three and Six Months Ended June 30, 1999 and 1998



                                   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 CONCEPTS CORP.


/s/ Daniel DelGiorno, Jr.
Daniel DelGiorno Jr.          President, C.E.O. Treasurer,      August 13, 1999
                              Director


/s/ George Aronson
George Aronson               Chief Financial Officer            August 13, 1999