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              September 30, 2000
                               -------------------------------------------------

                                       OR

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

For the transition period from ___________________ to ___________________

                           Commission File No. 0-26072

                                   THCG, INC.
             (Exact Name of Registrant as Specified in Its Charter)


                Delaware                                        87-0415597
      (State or Other Jurisdiction                           (I.R.S. Employer
    of Incorporation or Organization)                       Identification No.)

   512 Seventh Avenue, 17th Floor, New York, NY                    10018
      (Address of Principal Executive Office)                    (Zip Code)

       Registrant's telephone number, including area code: (212) 223-0440

         Indicate by check |X| 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____
                                             --------

         As  of  November  10,  2000,  there  were  13,335,317   shares  of  the
registrant's Common Stock outstanding.

<PAGE>

                                TABLE OF CONTENTS

PART I.  FINANCIAL INFORMATION

Item 1.     Financial Statements                                           Page

            Consolidated Statements of Financial Condition -
            as of September 30, 2000(unaudited) and December 31, 1999........ 2

            Consolidated Statements of Operations - for the nine
            months and the three months ended September 30, 2000
            (unaudited) and September 30, 1999 (unaudited)................... 3

            Consolidated Statement of Changes in Stockholders'
            Equity - for the nine months ended September 30, 2000
            (unaudited) ..................................................... 4

            Consolidated Statements of Cash Flows - for the nine
            months ended September 30, 2000 (unaudited) and
            September 30, 1999  (unaudited).................................. 5

            Notes to Consolidated Financial Statements (unaudited)........... 6

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

Item 3.     Quantitative and Qualitative Disclosures About Market Risk...... 12


PART II. OTHER INFORMATION

Item 1.     Legal Proceedings............................................... 13

Item 2.     Changes in Securities and Use of Proceeds....................... 13

Item 6.     Exhibits and Reports on Form 8-K................................ 14


                                      -2-
<PAGE>

                                     PART I

                              FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                  The following  Consolidated Financial Statements of THCG, Inc.
and its  subsidiaries  are  presented  on pages 2  through 6 hereof as set forth
below:


Consolidated Statements of Financial Condition - as of
  September 30, 2000 (unaudited) and December 31, 1999....................... 2

Consolidated Statements of Operations - for the nine
  months and the three months ended September 30, 2000
  (unaudited) and September 30, 1999 (unaudited)............................. 3

Consolidated Statements of Changes in Stockholders' Equity -
  for the nine months ended September 30, 2000 (unaudited) .................. 4

Consolidated Statements of Cash Flows - for the nine
  months ended  September 30, 2000 (unaudited) and
  September 30, 1999  (unaudited)............................................ 5

Notes to Consolidated Financial Statements (unaudited)....................... 6


                                      -1-

<PAGE>
<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands, except share and per share data)
                                                                                   September 30,         December 31,
                                                                                       2000                  1999
                                                                                    (unaudited)           (audited)
                                                                                  ---------------      ---------------
                                                                                     (Note 1)              (Note 1)
ASSETS
<S>                                                                                      <C>                <C>
     Cash and cash equivalents                                                           $4,635             $1,592
     Marketable securities                                                               14,763              2,812
     Nonmarketable securities, partnership, limited liability company
     and other interests (See Note 2)                                                    10,032              7,104
     Ownership interest in company accounted for on the equity method (See
     Note 4)                                                                              4,281               ----

     Fees and other receivables, net of allowance                                         2,737                352
     Prepaid expenses and other assets                                                      637                279

     Loans receivable, related parties                                                      415                312

     Furniture, fixtures and equipment - net                                              1,743                104
     Goodwill and other intangible assets, net of
         accumulated amortization                                                        22,425             16,610
     Assets of discontinued operations (See Note 3)                                        ----              6,537
                                                                                 ---------------     --------------
         Total Assets                                                                   $61,668            $35,702
                                                                                 ===============     ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
     Accounts payable, accrued expenses and other current liabilities                    $5,200             $1,933
     Loan  payable                                                                         ----                565
     Notes payable                                                                         ----                600
     Deferred income taxes payable                                                         ----                495
                                                                                 ---------------     --------------
          Total Liabilities                                                               5,200              3,593
                                                                                 ---------------     --------------
Stockholders' Equity:
     Cumulative preferred stock - variable rate, $1,000 par value, 5,000
     shares issued and outstanding at September 30, 2000                                  5,000               ----
Common stock, $.01 par value, 50,000,000 shares authorized; 13,404,169 and
     11,751,113 issued and outstanding at September 30, 2000 and December
     31,1999, respectively                                                                  134                118
Additional paid-in capital                                                               89,060             68,777
Deferred compensation                                                                   (21,337)           (27,294)

Accumulated deficit                                                                     (16,389)            (9,492)
                                                                                 ---------------     --------------
     Total Stockholders' Equity                                                          56,468             32,109
                                                                                 ---------------     --------------
     Total Liabilities and Stockholders' Equity                                         $61,668            $35,702
                                                                                 ===============     ==============
</TABLE>

See Notes to Consolidated Financial Statements


                                      -2-

<PAGE>
<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)

                                                                    Nine Months Ended              Three Months Ended
                                                               ----------------------------    ----------------------------
                                                              September 30,   September 30,    September 30,   September 30,
                                                                   2000           1999             2000            1999
                                                               (unaudited)    (unaudited)      (unaudited)      (unaudited)
                                                               -------------  -------------    ------------- --------------
Revenues
<S>                                                                  <C>            <C>              <C>              <C>
Venture service fees                                                 $5,788         $2,250           $2,469           $312
Realized and unrealized gain (loss) in investments, net, and
  interest income                                                    13,885             28              698             10
                                                               -------------  -------------    ------------- --------------
     Total Revenues                                                  19,673          2,278            3,167            322

Expenses
Selling, general and administrative                                  10,970          2,506            4,285            960
Equity-based compensation                                             7,144          -----            2,144          -----
Amortization of acquired intangibles                                  2,776          -----              994          -----
                                                               -------------  -------------    ------------- --------------
     Total Expenses                                                  20,890          2,506            7,423            960

Income (loss) from continuing operations                             (1,217)          (228)          (4,256)          (638)
Provision for income taxes (tax benefit)                                (97)         -----            -----          -----
                                                               -------------  -------------    ------------- --------------

Income (loss) before discontinued operations and equity in
  losses of company accounted for on the equity method               (1,120)          (228)          (4,256)          (638)
Equity in losses of company accounted for on the equity
  method                                                               (745)         -----             (253)         -----
                                                               -------------  -------------    ------------- --------------

Net income (loss) before discontinued operations                     (1,865)          (228)          (4,509)          (638)
Net (loss) from discontinued operations                              (4,951)         -----            -----          -----
                                                               -------------  -------------    ------------- --------------

Net income (loss)                                                    (6,816)          (228)          (4,509)          (638)
Dividend on preferred stock                                              81          -----               81          -----
                                                               -------------  -------------    ------------- --------------
Net income (loss) available for common stock                        ($6,897)         ($228)         ($4,590)         ($638)
                                                               =============  =============    ============= ==============

Basic and Diluted Earnings Per Share
Basic income (loss) per share from continuing operations             ($0.16)        ($0.06)          ($0.36)        ($0.17)
Basic (loss) per share from discontinued operations                   (0.39)         -----            -----          -----
                                                               -------------  -------------    ------------- --------------
Basic income (loss) per share                                        ($0.55)        ($0.06)          ($0.36)        ($0.17)
                                                               =============  =============    ============= ==============

Basic weighted average common shares outstanding                 12,543,681      3,723,000       12,890,039      3,723,000
                                                               =============  =============    ============= ==============
Diluted weighted average common shares outstanding               12,543,681      3,723,000       12,890,039      3,723,000
                                                               =============  =============    ============= ==============
</TABLE>

See Notes to Consolidated Financial Statements


                                      -3-

<PAGE>
<TABLE>
<CAPTION>

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(in thousands, except share data)

                                      Preferred Stock           Common Stock       Additional
                                   Number of                Number of               Paid-in     Deferred    Accumulated
                                    Shares       Amount      Shares       Amount    Capital   Compensation    Deficit      Total
                                   ------------------------------------------------------------------------------------------------

<S>                                      <C>       <C>       <C>              <C>     <C>        <C>            <C>        <C>
Balance, December 31, 1999                   0         $0    11,751,113       $118    $68,777    ($27,294)       ($9,492)  $32,109

Proceeds from exercise of warrants
  for common stock                                              633,373          6      5,694                               $5,700

Issuance of preferred stock and
  related closing cost                   5,000     $5,000                               (311)                               $4,689

Proceeds from exercise of options
  for common stock                                                7,500          1         26                                  $27

Issuance of common stock in
  connection with investments                                 1,012,183          9     13,687                              $13,696

Deferred compensation for stock
  options issued to employees

Amortization of deferred                                                                1,187      (1,187)                      $0
   compensation                                                                                     7,144                   $7,144
Net loss                                                                                                          (6,816)  ($6,816)
Dividend on preferred stock                                                                                          (81)     ($81)
                                   ------------------------------------------------------------------------------------------------
Balance, September 30, 2000              5,000     $5,000    13,404,169       $134    $89,060    ($21,337)      ($16,389)  $56,468
                                   ================================================================================================
</TABLE>

See Notes to Consolidated Financial Statements

                                      -4-

<PAGE>
<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF CASH FLOWS  (in thousands)
                                                                          For the Nine Months Ended
                                                                    ------------------------------------
                                                                     September 30,         September 30,
                                                                          2000                 1999
                                                                      (unaudited)           (unaudited)
                                                                    ---------------       -------------
Cash flows from operating activities:
<S>                                                                      <C>                  <C>
Net loss                                                                 ($6,816)             ($228)

Adjustment  to  reconcile  net  income  (loss)  to net
  cash  used in  continuing operating activities:
Loss from discontinued operations                                          4,951                ---
Equity in losses of company accounted for on the equity method               745                ---
Net change in unrealized appreciation of investments                     (13,352)               ---
Gain on sale of marketable securities                                        (23)               ---
Equity-based compensation                                                  7,144                ---
Depreciation and amortization                                                 69                 14
Amortization of intangible assets                                          2,776                ---
Bad debt expense                                                             250                165
Deferred income tax provision                                               (495)               ---

Changes in operating assets and liabilities:
Fees and other receivables                                                (2,635)               310
Prepaid expenses and other assets                                           (358)                 5
Loans receivable, related parties                                           (103)               (72)
Accounts payable, accrued expenses
  and other current liabilities                                            2,414               (242)
                                                                    -------------      -------------
Net cash used in operating activities                                     (5,433)               (48)
                                                                    -------------      -------------

Cash flows from investing activities:
Proceeds from sale of marketable securities                                3,678                ---
Investments in partnerships, limited liability companies and
other interests                                                           (3,428)               (90)
Purchase of furniture and equipment                                       (1,708)               (32)
                                                                    -------------      -------------
Net cash used by investing activities                                     (1,458)              (122)
                                                                    -------------      -------------

Cash flows from financing activities:
Proceeds from the exercise of warrants for common stock                    5,700                ---
Proceeds from the exercise of options for common stock                        27                ---
Proceeds from issuance of preferred stock                                  5,000                ---
Principal payment on loan payable                                           (565)               ---
Dividend payment on preferred stock                                          (81)               ---
Repayment of subscription receivable                                         ---                 67
                                                                    -------------      -------------
Net cash provided by financing activities                                 10,081                 67
                                                                    -------------      -------------
Net cash used in discontinued operations                                    (147)                ---
                                                                    -------------      -------------

Net increase (decrease) in cash and cash equivalents                       3,043               (103)
Cash and cash equivalents - January 1,                                     1,592                610
                                                                    -------------      -------------

Cash and cash equivalents - September 30,                                 $4,635               $507
                                                                    =============      =============
Supplemental disclosure of cash flow information:
Cash paid:
Interest                                                                     $27                ---
Taxes                                                                         $4                $48

Supplemental disclosure of noncash investing and financing
  activities:
Issuance of stock in connection with investment in Global Credit
  Services, Inc.                                                          $5,025                ---
Issuance of stock in connection with Zinook Ltd. acquisition              $8,671                ---
Retirement of preferred stock in connection with the
recapitalization                                                             ---             $1,000
</TABLE>

See Notes to Consolidated Financial Statements


                                      -5-

<PAGE>

                                   THCG, Inc.
                   Notes to CONSOLIDATED financial statements
                               September 30, 2000

Note 1 - BASIS OF PRESENTATION

         The accompanying  consolidated financial statements as of September 30,
2000 are unaudited;  however,  in the opinion of the management of THCG, Inc., a
Delaware   corporation   ("THCG"),   such  statements  include  all  adjustments
(consisting of normal recurring  accruals) necessary to present a fair statement
of the information presented therein. The balance sheet at December 31, 1999 was
derived from the audited financial statements at such date.

         Pursuant to  accounting  requirements  of the  Securities  and Exchange
Commission  (the  "SEC")  applicable  to  Quarterly  Reports on Form  10-Q,  the
accompanying financial statements and these Notes do not include all disclosures
required by  generally  accepted  accounting  principles  for audited  financial
statements.  Accordingly,  these  statements  should be read in conjunction with
THCG's audited financial  statements  included in Amendment No. 2 on Form 10-K/A
to its Annual Report on Form 10-K for the fiscal year ended December 31, 1999.

         Results  of  operations  for  interim   periods  are  not   necessarily
indicative of those to be achieved for fiscal years.

         The  financial  statements  of THCG  include the accounts of its wholly
owned  subsidiaries,  Mercury  Coast  Inc.  ("Mercury  Coast")  and  Tower  Hill
Securities,  Inc. ("Tower Hill  Securities") and its wholly owned  subsidiaries,
THCG LLC and THCG Ventures  LLC.  THCG Ventures LLC is a management  company for
two related venture capital companies, THCG Venture Partners I LLC ("Venture I")
and THCG Partners LLC. THCG Ventures LLC has a 0.45%  member's  interest in THCG
Partners LLC. THCG Partners LLC and THCG LLC have a 15.1% and a 9.9%  membership
interest,  respectively, in Venture I. All significant intercompany accounts and
transactions are eliminated in consolidation.  Pacific Financial  Services Corp.
("Pacific  Financial") and Inland Financial Corporation ("Inland Financial") are
wholly owned subsidiaries of THCG whose operations have been  discontinued.  See
Note 3 of the Notes to Consolidated Financial Statements.

         On April 11, 2000, THCG announced the acquisition of approximately $300
thousand of assets of certain businesses  operated under the Giza Group ("Giza")
name in Israel. Zinook Ltd. ("Zinook") is the entity's new name. The transaction
closed on September 1, 2000 and is being accounted for using the purchase method
of  accounting.  The businesses  acquired are the investment  banking and equity
research  operations  of Giza.  THCG issued  750,000  shares of common  stock in
connection with the acquisition.

Note 2 - PARTNERSHIP, LIMITED LIABILITY COMPANY AND OTHER INTERESTS

         On September 30, 2000, THCG negotiated the termination of Walnut Growth
Partners,  L.P.  ("WGP").  THCG owns 100% of the  general  partner  of WGP.  The
general partner owned 1% of WGP and managed WGP's assets,  for which services it
was entitled to management  fees and  additional  compensation  in the form of a
carried interest equal to 20% of the profits of WGP after the limited  partner's
capital was returned.

         As a result of the termination of WGP, THCG received  133,932 shares of
webMethods,  Inc. ("webMethods") and WGP's positions in private companies.  THCG
is  currently  settling  the  compensation  due  to  a  former  employee.   This
compensation  will  approximate  10% of the  positions  received  by THCG in the
liquidation of WGP.

         On February 11, 2000, webMethods, Inc., a company in the WGP portfolio,
issued stock to the public at $35.00 per share.  The price of webMethods'  stock
has been  extremely  volatile.  On March 31, 2000, the stock price of webMethods
was  $241.38 per share.  The price of  webMethods'  stock  declined to as low as
$44.50  per  share on April  17,  2000.  On  September  29,  2000,  the price of
webMethods' stock was $115.125 per share.

         Venture I made an additional  investment in an existing partner company
of $500  thousand  during the three  months  ended  September  30,  2000.  As of
September 30, 2000,  THCG's interest in its venture  partner  companies owned by
Venture I and THCG Partners LLC aggregated $1.9 million.

                                      -6-

<PAGE>

Note 3 - DISCONTINUED OPERATIONS

         As disclosed in Amendment No. 1 on Form 10-Q/A to its Quarterly  Report
on Form 10-Q for the quarter ended March 31, 2000,  two of THCG's  subsidiaries,
Pacific Financial and Inland Financial, engaged in the factoring business in the
state of Washington.  THCG completed a strategic review in the first quarter and
concluded that the factoring  business was not consistent  with THCG's focus and
corporate objectives.  Accordingly, THCG is winding down the operations of these
two  subsidiaries  and  has  accounted  for  these  businesses  as  discontinued
operations.

NOTE 4 - OWNERSHIP INTEREST IN COMPANY ACCOUNTED FOR ON THE EQUITY METHOD

         On February 7, 2000,  THCG  exchanged  $5.0 million of its common stock
for a 25% interest in Global Credit Services, Inc. ("Global Credit") and Venture
I simultaneously  invested in Global Credit. THCG is accounting for its holdings
in Global Credit using the equity method.

         THCG has preliminarily  identified  certain  intangible assets totaling
approximately  $5.1 million which are being  amortized over a seven year period.
Amortization  expense  of $470  thousand  is  included  in  "Equity in losses of
company  accounted for on the equity  method" in the  accompanying  Consolidated
Statements of Operations.

NOTE 5 - PREFERRED STOCK

         On August 2, 2000, THCG issued 5,000 shares of its Series A Convertible
Participating Preferred Stock (the "Preferred Stock") and a related Warrant (the
"Warrant")  in a private  placement  to Castle  Creek  Technology  Partners  LLC
("Castle Creek"),  a private investment fund focused primarily on the technology
sector. The gross proceeds of the offering were $5.0 million.

         The  Preferred   Stock  is   convertible   (subject  to   anti-dilution
protections)  into THCG common  stock,  par value  $0.01 per share (the  "Common
Stock"),  at a fixed  conversion  price of $5.039 per share at any time prior to
December 29, 2000. Thereafter,  the conversion price will be the lower of $5.039
per share and 90% of the prevailing  market price of the Common Stock,  provided
that regardless of the market price for the Common Stock, a maximum of 2,529,568
shares of Common Stock are issuable upon  conversion of the Preferred  Stock. If
the  market  price of the Common  Stock is  greater  than 200% of the then fixed
conversion  price of the Preferred Stock for at least 10 consecutive days and if
certain  other  conditions  are met,  THCG may cause the  Preferred  Stock to be
automatically  converted into Common Stock.  Unless previously  converted by the
holder, the Preferred Stock  automatically  converts into Common Stock on August
2, 2003,  and is subject to optional  redemption  by THCG at any time subject to
the payment of premiums and the satisfaction of other conditions.

         A premium  is  payable  quarterly  on the  Preferred  Stock on the last
business day of each calendar quarter in an amount equal to 10% per annum of the
stated value of the Preferred  Stock ($5.0  million).  The premium is payable in
cash until THCG's  registration  statement described below is declared effective
and thereafter,  if the conditions  described in the certificate of designations
are  satisfied,  the  premium  is  payable,  at  THCG's  election,  in cash,  in
additional  shares of common  stock  (valued  at a price per share  equal to the
market price, as defined in the certificate of designations, of the common stock
on the date the  premium is paid) or in  additional  shares of  Preferred  Stock
valued at its stated value.

         The Warrant has a four-year term and entitles the holder to purchase up
to 396,899  shares of Common Stock at a fixed exercise price of $5.039 per share
throughout the term of the Warrant  (subject to anti-dilution  protections).  If
the  market  price of the Common  Stock is  greater  than 200% of the then fixed
exercise  price of the Warrant for at least 10  consecutive  days and if certain
other  conditions  are met,  THCG may  cause  the  Warrant  to be  automatically
exercised for Common Stock.

         Pursuant to a registration rights agreement,  THCG filed a registration
statement  under the Securities Act of 1933, as amended,  registering for resale
by the holders  thereof the Common Stock  underlying the Preferred Stock and the
Warrant.  THCG must use its best efforts to cause the registration  statement to
become effective as soon as practicable.  The registration statement has not yet
been  declared  effective.  THCG may be  required  to pay Castle  Creek  certain
amounts as specified in the  registration  rights  agreement if the registration
statement is not declared effective within 120 days of August 2, 2000 and is not
maintained effective.

                                      -7-

<PAGE>

NOTE 6 - SUBSEQUENT EVENTS

         On October 23, 2000,  THCG announced a plan to repurchase up to 500,000
shares of its stock from time-to-time in open market  transactions at prevailing
market prices.  As of November 8, 2000, THCG had repurchased  52,100 shares at a
cost of approximately $102 thousand.


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

         As used in this Item 2, "we," "our" and "us" refer to THCG.

Forward-Looking Statements

         This Quarterly Report on Form 10-Q contains a number of forward-looking
statements  within the meaning of Section 27A of the  Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Specifically, all statements
other  than  statements  of  historical  facts  included  in  this  Report,   or
incorporated  herein by reference,  regarding our financial  position,  business
strategy and the plans and  objectives of management  for future  operations are
forward-looking  statements.  These forward-looking  statements are based on the
beliefs of management,  as well as assumptions made by and information currently
available to  management.  When used in this Report,  including the  information
incorporated  by  reference,  the  words  "anticipate,"  "believe,"  "estimate,"
"expect," "may," "will," "continue," "intend" and "plan" and words or phrases of
similar import, as they relate to our financial position,  business strategy and
plans,  or objectives of  management,  are intended to identify  forward-looking
statements.  These  cautionary  statements  reflect our current  view  regarding
future events and are subject to risks, uncertainties and assumptions related to
various  factors  which include but may not be limited to those listed under the
heading  "Factors  Affecting  our  Future   Performance"  and  other  cautionary
statements in our Annual Report on Form 10-K for our fiscal year ended  December
31, 1999, filed with the SEC, which information is incorporated into this Report
by reference.

         Although we believe that our  expectations  are  reasonable,  we cannot
assure you that our expectations  will prove to be correct.  Based upon changing
conditions,  should any one or more of these risks or uncertainties materialize,
or should any underlying  assumptions  prove incorrect,  actual results may vary
materially  from  those  described  in this  Report  as  anticipated,  believed,
estimated,  expected,  intended  or  planned.  All  subsequent  written and oral
forward-looking  statements  attributable  to us (or to  persons  acting  on our
behalf)  are  expressly   qualified  in  their  entirety  by  these   cautionary
statements.

Overview

         Based in New York City, we are an  international  merchant banking firm
actively  engaged in building and  supporting  our global  portfolio of industry
leading technology  companies.  We help our partner companies succeed through an
integrated  matrix of financial,  business and technology  development  services
consisting of Venture  Funding,  Venture  Banking and Venture  Development  ("V3
Services"'). Within the technology sector, our V3 service offerings are targeted
in key segments, including Internet-enabling technologies,  broadband, wireless,
telecommunications  and  telecom  infrastructure,   among  others.  Zinook  Ltd.
("Zinook")  serves as one of our  global  technology  "Centers  of  Excellence,"
sourcing, screening and developing promising early-stage technology companies.

         On November 1, 1999, Walnut Financial Services, Inc. ("Walnut Financial
Services")  acquired Tower Hill  Securities.  However,  for financial  statement
purposes,  Tower Hill Securities  acquired Walnut Financial  Services and is the
surviving  entity.  Tower Hill  Securities  is the  successor to Hambro  America
Securities, Inc., the former U.S. investment banking subsidiary of Hambros, plc,
a  British  merchant  banking  firm.  In  March  1998,  the  investment  banking
operations  of Hambros,  plc were sold to Societe  Generale,  a French bank.  On
April 1, 1998, Joseph D. Mark and Adi Raviv, the principal  executives of Hambro
America Securities, Inc., acquired the company from Societe Generale.

         As part of our new business strategy, on December 29, 1999, we acquired
Mercury Coast, Inc.  ("Mercury Coast") a corporation  engaged in the business of
providing  business   acceleration   services,   including  strategic  planning,
operations and marketing consulting services, to Internet-based  businesses.  In
addition,  we acquired  Giza as  described  in Note 1 of the Notes to
Consolidated Financial Statements.

                                      -8-

<PAGE>

         The  financial   statements   contained  in  this  Report  reflect  the
operations of THCG for the nine months and the three months ended  September 30,
2000 and the  operations of Tower Hill  Securities for the nine months and three
months ended September 30, 1999.

Nine Months  Ended  September  30,  2000 as  compared  to the Nine Months  Ended
September 30, 1999

         Revenues

         Revenues  for the nine months  ended  September  30, 2000  increased to
$19.7  million from $2.3 million for the nine months ended  September  30, 1999.
The increase in revenues was primarily due to  significant  appreciation  of our
venture partner and venture portfolio company  securities and an increase in the
number of engagements and fee-based  services of our venture banking and venture
development activities.

         Venture  service  fees for the nine  months  ended  September  30, 2000
increased to $5.8 million from $2.3 million for the nine months ended  September
30,  1999.  The increase in these fees was  primarily  due to an increase in the
number of engagements and the fees earned from providing our venture banking and
venture development activities.

         Realized and unrealized  gain (loss) in  securities,  net, and interest
income  consist of the net  increases  (decreases)  in the value of the  venture
partner and venture  portfolio  company  securities  that we acquired or that we
received in exchange  for  services,  as well as  interest  income.  The gain in
securities,  net, increased to $13.9 million for the nine months ended September
30, 2000.  The increase was due primarily to the $13.7  million  increase in the
value of our wholly  owned  subsidiary  that is the general  partner of WGP (see
Note 2 of the Notes to Consolidated Financial Statements).

         Expenses

         Selling,  general and administrative expenses for the nine months ended
September  30, 2000  increased  to $11.0  million from $2.5 million for the nine
months ended  September 30, 1999. The increase was primarily due to increases in
the  number  of  employees,   their  compensation  and  related  benefits,   and
professional  fees.  Compensation and related benefits expense increased to $3.4
million for the nine months ended  September 30, 2000 from $933 thousand for the
nine months ended September 30, 1999.  Compensation expenses included bonuses to
professionals related to the improved results from our venture banking services,
as well as  additional  employees we hired to provide  venture  development  and
venture banking services to our venture partner  companies on a  fee-for-service
basis.  Professional fees for the nine months ended September 30, 2000 increased
to $2.3 million from $735 thousand for the nine months ended September 30, 1999.
The increase in professional fees results from fees paid to legal and accounting
professional  services firms for services in connection with the preparation and
filing  of  documents  with the SEC and for  professional  fees  related  to our
provision of venture funding services,  which services Tower Hill Securities did
not provide during the nine months ended  September 30, 1999.  Consulting  costs
related to venture  development  income  were $1.3  million  for the nine months
ended  September  30,  2000.  Tower  Hill  Securities  did not  provide  venture
development  services during the comparable period in 1999.  Foreign  affiliated
company  expenses,  which began in April 2000 and are related to the acquisition
of Zinook, amounted to $1.6 million for the nine months ended September 30, 2000
(see Note 1 of the Notes to Consolidated Financial Statements).

         Equity-based  compensation expenses for the nine months ended September
30, 2000 were $7.1 million. There were no equity-based compensation expenses for
the nine months ended  September 30, 1999.  Equity-based  compensation  expenses
consist of non-cash charges related to the amortization of unearned compensation
associated  with stock options granted at below fair market value and restricted
stock grants.  Amortization is over the vesting periods of the stock options and
restricted stock, which vesting periods generally range from ninety days to five
years.

         Amortization  of  acquired   intangibles  for  the  nine  months  ended
September  30, 2000  increased by $2.8 million  (including  the $468 thousand of
amortization  associated  with  Global  Credit  --see  Note  4 of the  Notes  to
Consolidated  Financial  Statements).  The increase in amortization  expenses is
primarily  related to the  amortization  of goodwill from our merger with Walnut
Financial  Services on November 1, 1999,  the  acquisition  of Mercury  Coast on
December 29, 1999,  the  acquisition of an interest in Global Credit on February
7, 2000 and to a lesser extent the acquisition of Zinook on September 1, 2000.

                                      -9-

<PAGE>

         Our deferred  income tax benefits  amounted to $97 thousand as a result
of loss from  continuing  operations  and $398 thousand was the result of a loss
from discontinued operations for the nine months ended September 30, 2000. There
were no  provisions  for income  taxes or tax benefits for the nine months ended
September 30, 1999.

         We decided to discontinue the accounts receivable factoring business in
the  first  quarter  (see  Note  3  of  the  Notes  to  Consolidated   Financial
Statements). We incurred a loss in the nine months ended September 30, 2000 from
discontinued operations of $5.3 million ($5.0 million after-tax).

Three  Months  Ended  September  30, 2000 as compared to the Three  Months Ended
September 30, 1999

         Revenues

         Revenues  for the three months ended  September  30, 2000  increased to
$3.2 million from $322  thousand for the three months ended  September 30, 1999.
The  increase  in  revenues  was  primarily  due to an increase in the number of
engagements  and fee-based  services of our venture  development and our venture
banking  activities  and a continued  appreciation  of our  venture  partner and
venture portfolio company securities.

         Venture  service  fees for the three months  ended  September  30, 2000
increased  to $2.5  million  from  $312  thousand  for the  three  months  ended
September 30, 1999.  The increase in these fees was primarily due to an increase
in fees earned from providing our venture development  services,  which services
we did not provide in the three months ended September 30, 1999.

         Realized and unrealized  gain (loss) in  securities,  net, and interest
income  consist of the net  increases  (decreases)  in the value of the  venture
partner and venture  portfolio  company  securities  that we acquired or that we
received in exchange  for  services,  as well as  interest  income.  The gain in
securities, net, increased to $698 thousand for the three months ended September
30, 2000 from $10 thousand for the three months ended  September  30, 1999.  The
increase  was due  primarily  to the  increase in the value of our wholly  owned
broker-dealer subsidiary, Tower Hill Securities.

         Expenses

         Selling, general and administrative expenses for the three months ended
September  30, 2000  increased to $4.3 million from $960  thousand for the three
months ended  September 30, 1999. The increase was primarily due to increases in
the  number  of  employees,   their  compensation  and  related  benefits,   and
professional  fees.  Compensation and related benefits expense increased to $1.6
million for the three months ended September 30, 2000 from $304 thousand for the
three months ended September 30, 1999. Compensation expenses included additional
employees we hired to provide venture  development and venture banking  services
to our venture partner companies on a fee-for-service  basis.  Professional fees
for the three months ended  September  30, 2000  increased to $564 thousand from
$288  thousand for the three months ended  September  30, 1999.  The increase in
professional  fees  primarily  related an increase in the fees paid to legal and
accounting  professional  services  firms for  services in  connection  with the
preparation  and  filing of  documents  with the SEC and for  professional  fees
related to our provision of venture funding services,  which services Tower Hill
Securities  did not provide  during the three months ended  September  30, 1999.
Foreign affiliated  company expenses,  which began in April 2000 and are related
to the  acquisition  of Zinook,  amounted to $834  thousand for the three months
ended  September  30,  2000 (see Note 1 of the Notes to  Consolidated  Financial
Statements).

         Equity-based compensation expenses for the three months ended September
30, 2000 were $2.1 million. There were no equity-based compensation expenses for
the three months ended September 30, 1999.  Equity-based  compensation  expenses
consist of non-cash charges related to the amortization of unearned compensation
associated  with stock options granted at below fair market value and restricted
stock grants.  Amortization is over the vesting periods of the stock options and
restricted stock, which vesting periods generally range from ninety days to five
years.

         Amortization  of  acquired  intangibles  for  the  three  months  ended
September  30, 2000  increased  by $944  thousand  (including  $182  thousand of
amortization  associated  with  Global  Credit  -- see  Note 4 of the  Notes  to
Consolidated  Financial  Statements).  The increase in amortization  expenses is
primarily  related to the  amortization  of goodwill from our merger with Walnut
Financial  Services on November 1, 1999,  the  acquisition  of Mercury  Coast on
December  29,  1999 and the  acquisition  of an  interest  in  Global  Credit on
February 7, 2000 and to a lesser extent the acquisition of Zinook on September
1, 2000.

                                      -10-

<PAGE>

         There were no provisions for income taxes or tax benefits for the three
months ended September 30, 2000 and September 30, 1999.

Liquidity and Capital Resources

         Our  business  is  capital   intensive.   In  the  future,   we  expect
periodically  to raise funds to acquire  equity  interests in and  establish new
partner companies,  to support our operations and expand our venture development
and venture  banking  services,  and to support the operations and growth of our
partner companies.  Our future capital requirements will depend in large part on
the number of partner  companies in which we acquire equity  interests and which
we  establish,  the  amounts of capital  we provide to these  companies  and the
timing of these payments. Our plans and the related capital requirements will be
dependent on various  factors,  such as  developments  in our  markets,  and the
availability  of  acquisition  and  entrepreneurial  opportunities.  If  we  are
successful  in  selling   additional  equity   securities,   our  then  existing
stockholders may suffer  significant  dilution.  However,  we may not be able to
obtain financing on acceptable terms, or at all, when we need it. If we require,
but are  unable to obtain,  additional  financing  in the  future on  acceptable
terms, or at all, we will not be able to continue our business strategy, respond
to changing business or economic conditions, withstand adverse operating results
or compete  effectively,  and our  business,  financial  condition and operating
results may be materially and adversely affected as a result.

         In February  2000,  we called for the  redemption  of our  outstanding
Class A Warrants (the  "Warrants"),  thereby causing the holders to exercise all
of the Warrants for $9 per share of common  stock.  This resulted in proceeds to
us of approximately  $5.7 million.  We issued 633,373 new shares of common stock
upon exercise of the Warrants.  We filed a  registration  statement with the SEC
covering the resale of these  shares for a period of 90 days.  This period ended
on August 7, 2000,  and on August 8, 2000, we filed a  post-effective  amendment
with the SEC to deregister any unsold shares of common stock.

         On April 11, 2000, THCG announced the acquisition of approximately $300
thousand in assets of certain businesses  operated under the Giza Group ("Giza")
name in Israel.  Zinook is the  entity's  new name.  The  transaction  closed on
September  1,  2000 and is being  accounted  for using  the  purchase  method of
accounting. Cash advanced by THCG to Zinook to fund Zinook's current operations,
which  totaled $1.3 million for the nine months ended  September  30, 2000,  are
being expensed in the consolidation.  We expect that we may fund any increase in
the expenses for Zinook's current operations.

         On August 2, 2000, THCG issued 5,000 shares of series A preferred stock
and a related warrant in a private placement to Castle Creek. The gross proceeds
of the  offering  were $5.0  million  (see  Note 5 of the Notes to  Consolidated
Financial Statements).

         During the nine months ended September 30, 2000, cash used in operating
activities  was $5.4  million  compared to $48  thousand  used in the six months
ended September 30, 1999.

         Cash used in investing  activities was $1.4 million for the nine months
ended  September 30, 2000 compared to $122 thousand used in the six months ended
September  30,  1999.


         Cash  provided by financing  activities  was $10.1 million for the nine
months ended  September 30, 2000  compared to $67 thousand  provided in the nine
months ended  September 30, 1999.  This  consisted  primarily of $5.7 million of
proceeds  from the  exercise  of the  Warrants in March 2000 and the sale of the
Preferred  Stock and the Warrant in August 2000.  We intend to continue to raise
capital to finance our strategy of building  dominant venture partner  companies
and investing in our operating business.

         Certain of our venture partner companies have the right to require that
we purchase  additional  equity  interests  in these  companies  in an aggregate
amount of cash approximating $350 thousand.

                                      -11-

<PAGE>

New Accounting Pronouncements

         In December 1999, the SEC issued Staff Accounting  Bulletin ("SAB") No.
101,  "Revenue  Recognition in Financial  Statements." SAB No. 101 expresses the
views of the SEC staff in applying generally accepted  accounting  principles to
certain revenue recognition issues. In June 2000, the SEC issued SAB No. 101B to
defer the effective date of the  implementation  of SAB No. 101 until the fourth
quarter  of fiscal  2000.  Management  is  currently  evaluating  the  impact of
adopting  this SAB,  but does not  believe  that  this SAB will have a  material
impact on its financial position or its results of operations.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The primary  market risk facing THCG is the  fluctuation  in the market
value of the  securities  THCG  acquires  in its  venture  partner  and  venture
portfolio companies, and the securities THCG receives in payment of fees for its
venture  development and venture banking  services.  The market prices for those
companies  that are publicly  held have been very  volatile,  experiencing  wide
fluctuations.  THCG's  profitability may be materially and adversely affected by
period-to-period  declines  in the  market  values of its  venture  partner  and
venture  portfolio  companies.  Historically,  THCG has not generally engaged in
hedging transactions to minimize this risk.

         THCG is not  subject  to market  risk  associated  with risk  sensitive
instruments  because  THCG does not  invest in  instruments  that are not United
States instruments and THCG does not enter into hedging transactions.

         Historically,  THCG has had very low  exposure  to  changes  in foreign
currency  exchange  rates,  and as  such,  has  not  used  derivative  financial
instruments to manage foreign currency  fluctuation  risk. For the quarter ended
September  30, 2000 and at present,  THCG does not believe  that its exposure to
changes in foreign currency  exchange rates has increased.  As THCG develops its
international  operations  and  expands  its  global  coverage  of the  Internet
industry,  including through Giza, THCG's risk of foreign currency exchange rate
fluctuation  may  increase  significantly.  Therefore,  in the future,  THCG may
consider utilizing derivative instruments to mitigate these risks.


                                      -12-

<PAGE>

                                     PART II

                                OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

         With respect to the action brought  against Tower Hill  Securities Inc.
("Tower Hill") by Yoav Bitter,  previously  described in THCG's Annual Report on
Form 10-K for the fiscal year ended December 31, 1999, Mr. Bitter filed a motion
on April 13,  2000  seeking  reargument  or  modification  of the March 14, 2000
decision and order of the New York State Supreme Court Appellate Division, First
Department,  that dismissed Mr. Bitter's appeal. In the alternative,  the motion
sought  permission to appeal to the New York State Court of Appeals.  On May 25,
2000, the Appellate  Division issued an order  unanimously  denying Mr. Bitter's
April 13, 2000 motion. On July 6, 2000, Mr. Bitter filed a motion with the Court
of Appeals  requesting  leave to appeal to that court.  On October 12, 2000, the
Court of Appeals denied Mr. Bitter's motion.

         As noted in THCG's Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 2000, on June 18, 1999,  Tower Hill initiated an NASD arbitration
against Mr.  Bitter for  reimbursement  of  unauthorized  expenses and return of
company  property.  Mr.  Bitter  filed  a  counterclaim  against  Tower  Hill on
September 9, 1999, in which he denied liability for Tower Hill's claims and also
alleged that the company was liable to him for $158,000  for  severance  pay, an
unpaid bonus,  and certain tuition  expenses.  On September 17, 1999, Tower Hill
filed an answer to the  counterclaim,  denying all the substantive  allegations.
The NASD has appointed a three-person  arbitration  panel.  The arbitrators held
pre-hearing  conferences on July 20, 2000 and September 7, 2000. In August 2000,
Tower Hill  dropped its claim for return of company  property  after Mr.  Bitter
returned the property that was the subject of the claim. In October 2000,  Tower
Hill dropped its claim for unauthorized expenses. On October 4, 2000, Mr. Bitter
purported to file  additional  counterclaims  that would raise his alleged claim
for damages to in excess of $498,500,  but the arbitrators ruled that they would
not consider the additional  counterclaims.  The arbitrators conducted a hearing
concerning the counterclaims on October 24-25,  2000; an additional  hearing day
will be scheduled at some point in the future.

         In  litigation  described in THCG's  Annual Report on Form 10-K for the
fiscal year ended  December 31, 1999,  THCG,  Inland  Financial  Corporation,  a
wholly owned subsidiary of THCG ("Inland"),  and the chief executive  officer of
Inland were sued in the  Superior  Court of  Washington  for  Spokane  County in
November  1999  regarding  participations  sold by Inland in  certain  factoring
transactions  initiated by Inland.  On May 9, 2000,  certain former employees of
Inland,  including its chief executive officer,  filed an involuntary bankruptcy
petition  against  Inland in the  Bankruptcy  Court for the Eastern  District of
Washington.  The Court held hearings in October and November of 2000 and has not
issued a decision.  THCG and Inland, an inactive subsidiary,  are contesting the
petition and are evaluating  possible claims against the chief executive officer
and other former  employees  of Inland (see Note 3 of the Notes to  Consolidated
Financial Statements).

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

         On August 2, 2000, THCG issued 5,000 shares of its Series A Convertible
Participating Preferred Stock (the "Preferred Stock") and a related Warrant (the
"Warrant")  in a private  placement  to Castle  Creek  Technology  Partners  LLC
("Castle Creek"),  a private investment fund. The gross proceeds of the offering
were $5.0 million.

         The  Preferred   Stock  is   convertible   (subject  to   anti-dilution
protections)  into THCG common  stock,  par value  $0.01 per share (the  "Common
Stock"),  at a fixed  conversion  price of $5.039 per share at any time prior to
December 29, 2000. Thereafter,  the conversion price will be the lower of $5.039
per share and 90% of the prevailing  market price of the Common Stock,  provided
that regardless of the market price for the Common Stock, a maximum of 2,529,568
shares of Common Stock are issuable upon  conversion of the Preferred  Stock. If
the  market  price of the Common  Stock is  greater  than 200% of the then fixed
conversion  price of the Preferred Stock for at least 10 consecutive days and if
certain  other  conditions  are met,  THCG may cause the  Preferred  Stock to be
automatically  converted into Common Stock.  Unless previously  converted by the
holder, the Preferred Stock  automatically  converts into Common Stock on August
2, 2003,  and is subject to optional  redemption  by THCG at any time subject to
the payment of premiums and the satisfaction of other conditions.

         A premium  is  payable  quarterly  on the  Preferred  Stock on the last
business day of each calendar quarter in an amount equal to 10% per annum of the
stated value of the Preferred  Stock ($5.0  million).  The premium is

                                      -13-

<PAGE>

payable in cash until the Company's  registration  statement  described below is
declared  effective  and  thereafter,   if  the  conditions   described  in  the
certificate  of  designations  are  satisfied,  the premium is  payable,  at the
Company's  election,  in cash, in additional shares of common stock (valued at a
price per share  equal to the market  price,  as defined in the  certificate  of
designations,  of the  common  stock  on the  date  the  premium  is paid) or in
additional shares of Preferred Stock valued at its stated value.

         The Warrant has a four-year term and entitles the holder to purchase up
to 396,899  shares of Common Stock at a fixed exercise price of $5.039 per share
throughout the term of the Warrant  (subject to anti-dilution  protections).  If
the  market  price of the Common  Stock is  greater  than 200% of the then fixed
exercise  price of the Warrant for at least 10  consecutive  days and if certain
other  conditions  are met,  THCG may  cause  the  Warrant  to be  automatically
exercised for Common Stock.

         Pursuant to a registration rights agreement,  THCG filed a registration
statement  under the Securities Act of 1933, as amended,  registering for resale
by the holders  thereof the Common Stock  underlying the Preferred Stock and the
Warrant.  The  Company  must use its best  efforts  to  cause  the  registration
statement to become effective as soon as practicable. The registration statement
has not yet been  declared  effective.  THCG may be required to pay Castle Creek
certain  amounts  as  specified  in the  registration  rights  agreement  if the
registration  statement is not declared  effective  within 120 days of August 2,
2000 and is not maintained effective.

         To the extent  the  Preferred  Stock is  converted  and the  Warrant is
exercised,  a significant  number of shares of Common Stock may be sold into the
market,  which could  decrease the price of the Common  Stock,  encourage  short
sales and  substantially  dilute the interest of other  holders of Common Stock.
Short  sales could place  further  downward  pressure on the price of the Common
Stock.  In that case,  THCG would be required to issue an  increasingly  greater
number of shares of Common Stock upon future  conversions of the Preferred Stock
of up to a maximum of 2,529,568 shares, sales of which could continue to depress
the price of the Common Stock.

         Holders of the Preferred Stock are entitled to priority over holders of
Common  Stock in any  liquidation  of THCG.  THCG may not pay  dividends  on the
Common  Stock nor may it purchase  Common  Stock  without  first  obtaining  the
approval of the holders of two-thirds of the Preferred Stock.

         As part of the compensation paid to its placement agent for the private
placement,  THCG issued to Ladenburg Thalmann & Co. a warrant to purchase 39,474
shares of Common  Stock at a fixed  exercise  price of $5.70 per share of Common
Stock. The warrant was issued on August 2, 2000 and expires on August 2, 2004.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits

         The following exhibits are filed as part of this report:

         Exhibit No.            Description
         -----------            -----------

         10.1                   Amendment  dated  as of  August  9,  2000 to the
                                Employment Agreement dated as of February 1, 200
                                between THCG Ventures, LLC and Evan Marks.


         27.1                   Financial Data Schedule.

         (b)      Reports on Form 8-K

         THCG filed a Current Report on Form 8-K, dated August 2, 2000, with the
SEC on August 3, 2000 to report  the  issuance  of 5,000  shares of its Series A
Convertible  Participating  Preferred  Stock and a related  warrant in a private
placement.


                                      -14-

<PAGE>

                                   SIGNATURES

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



                                        THCG, Inc.


                                        By: /s/ Adi Raviv
                                            -------------------------------
                                        Name:   Adi Raviv
                                        Title:  Co-Chairman of the Board of
                                                Directors and Chief Financial
                                                Officer (Principal Financial
                                                and Accounting Officer)

Date:  November 14, 2000


                                      -15-

<PAGE>

                                  EXHIBIT LIST

Exhibit No.           Description
-----------           -----------

10.1                  Amendment  dated as of August  9,  2000 to the  Employment
                      Agreement  dated  as of  February  1,  2000  between  THCG
                      Ventures, LLC and Evan Marks.

27.1                  Financial Data Schedule.


                                      -16-