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, 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.)

   650 Madison Avenue, 21st Floor, New York, NY                  10022
      (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 August 14, 2000, there were 12,654,169 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  June 30, 2000 (unaudited) and December 31, 1999...........2

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

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

             Consolidated Statements of Cash Flows - for the six
             months ended June 30, 2000 (unaudited) and June 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 4.      Submission of Matters to a Vote of Security Holders.............13

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

<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
June 30, 2000 (unaudited) and December 31, 1999.............................   2

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

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

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

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

                                       1

<PAGE>
<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands, except per share data)

                                                                                         June 30,            December 31,
                                                                                           2000                  1999
                                                                                       (unaudited)           (audited)
                                                                                     ----------------     ----------------
ASSETS
<S>                                                                                        <C>                   <C>
     Cash and cash equivalents                                                             $4,226                $1,592
     Marketable and nonmarketable securities                                                6,203                 7,863
     Partnership, limited liability company and other interests (See Note 2)               15,673                 2,053
     Ownership interest in company accounted for on the equity method (See                  4,533                  ----
       Note 4)

     Fees and other receivables, net of allowance                                           2,257                   352
     Prepaid expenses and other assets                                                        346                   279

     Loans receivable, related parties                                                        375                   312

     Furniture, fixtures and equipment - at cost, less accumulated depreciation               200                   104
     Excess of cost over fair value of net assets acquired, net of
         accumulated amortization                                                          26,203                29,266
     Assets of discontinued operations (See Note 3)                                          ----                 6,537
                                                                                  ----------------     -----------------

         Total Assets                                                                     $60,016               $48,358
                                                                                  ================     =================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
     Accounts payable, accrued expenses and others                                         $2,207                  $131

     Liabilities of discontinued operations                                                   889                 2,967

     Deferred income taxes payable                                                           ----                   495
                                                                                  ----------------     -----------------

          Total Liabilities                                                                 3,096                 3,593
                                                                                  ----------------     -----------------
Stockholders' equity:
     Common stock, $.01 par value, 50,000,000 shares authorized; 12,651,669 and
     11,751,113 issued and outstanding at June 30, 2000 and December 31, 1999,
     respectively                                                                             127                   118

Additional paid-in capital                                                                 93,690                81,601
Accumulated deficit                                                                       (13,248)               (9,660)

Unearned compensation                                                                     (23,649)              (27,294)
                                                                                  ----------------     -----------------

     Total Stockholders' Equity                                                            56,920                44,765
                                                                                  ----------------     -----------------

     Total Liabilities and Stockholders' Equity                                           $60,016               $48,358
                                                                                  ================     =================

See Notes to Consolidated Financial Statements
</TABLE>

                                       2

<PAGE>
<TABLE>
<CAPTION>

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

                                                                    Six Months Ended               Three Months Ended
                                                               ----------------------------    ----------------------------
                                                                 June 30,       June 30,         June 30,      June 30,
                                                                   2000           1999             2000          1999
                                                               (unaudited)    (unaudited)      (unaudited)    (unaudited)
                                                               -------------  -------------    ------------- --------------
Revenues
<S>                                                               <C>           <C>               <C>           <C>
Venture service fees                                              $3,319        $1,938            $1,836        $1,672
Realized and unrealized gain (loss) in securities, net, and
  interest income                                                 13,187            16               375            16
                                                               -------------  -------------    ------------- --------------
     Total Revenues                                               16,506         1,954             2,211         1,688

Expenses
Selling, general and administrative                                6,685         1,531             3,679         1,028
Equity-based compensation                                          5,000         -----             2,913         -----
Amortization of acquired intangibles                               3,064         -----             1,532         -----
                                                               -------------  -------------    ------------- --------------
     Total Expenses                                               14,749         1,531             8,124         1,028

Income (loss) from continuing operations                           1,757           423            (5,913)          660
Provision for income taxes (tax benefit)                             506           170              (495)          158
                                                               -------------  -------------    ------------- --------------

Income (loss) before discontinued operations and equity in
  losses of company accounted for on the equity method             1,251           253            (5,418)          502
Equity in losses of company accounted for on the equity
  method                                                            (492)         ----              (492)         ----
                                                               -------------  -------------    ------------- --------------

Net income (loss) before discontinued operations                     759           253            (5,910)          502
Net (loss) from discontinued operations                           (4,347)         ----              ----          ----
                                                               -------------  -------------    ------------- --------------

Net income (loss)                                                ($3,588)         $253           ($5,910)         $502
                                                               =============  =============    ============= ==============

Basic Earnings Per Share
Basic income (loss) per share from continuing operations            $0.06         $0.07           ($0.47)         $0.13
Basic (loss) per share from discontinued operations                 (0.35)       -----             -----          -----
                                                               -------------  -------------    ------------- --------------
Basic income (loss) per share                                      ($0.29)        $0.07           ($0.47)         $0.13
                                                               =============  =============    ============= ==============

Diluted Earnings Per Share
Diluted income (loss) per share from continuing operations          $0.05         $0.07           ($0.47)        $0.13
Diluted (loss) per share from discontinued operations               (0.28)       -----             -----         -----
                                                               -------------  -------------    ------------- --------------
Diluted income (loss) per share                                    ($0.23)        $0.07           ($0.47)        $0.13
                                                               =============  =============    ============= ==============

Basic weighted average common shares outstanding               12,368,839     3,723,000        12,635,592    3,723,000
                                                               =============  =============    ============= ==============
Diluted weighted average common shares outstanding             15,387,539     3,723,000        12,635,592    3,723,000
                                                               =============  =============    ============= ==============

See Notes to Consolidated Financial Statements
</TABLE>

                                       3

<PAGE>
<TABLE>
<CAPTION>

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

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

<S>                                          <C>            <C>      <C>           <C>         <C>          <C>
Balance, December 31, 1999                   11,751,113      $118    $81,601      ($27,294)    ($9,660)    $44,765

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

Proceeds from exercise of options for
   common stock                                   5,000         1         17                                   $18

Issuance of common stock in connection
   with investment                              262,183         2      5,023                                $5,025

Unearned compensation for stock options
   issued to employees                                                 1,355        (1,355)                     $0
Amortization of unearned compensation                                                5,000                  $5,000
Net income (loss)                                                                               (3,588)    ($3,588)

                                             ------------------------------------------------------------------------
Balance, June 30, 2000 (unaudited)           12,651,669      $127    $93,690      ($23,649)   ($13,248)    $56,920
                                             ========================================================================

See Notes to Consolidated Financial Statements
</TABLE>


                                       4

<PAGE>
<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
                                                                           For the Six Months Ended
                                                                    ---------------------------------------
                                                                     June 30, 2000          June 30, 1999
                                                                      (unaudited)            (unaudited)
                                                                    -----------------      ----------------
<S>                                                                    <C>                    <C>
Cash flows from operating activities:
Net income (loss)                                                        ($3,588)                 $411
Adjustment to reconcile net income (loss) to net cash used in
  continuing operating activities:
Loss from discontinued operations                                          4,347                   ---
Equity in losses of company accounted for on the equity method               492                   ---
Net change in unrealized appreciation of investments                     (13,435)                  ---
Loss (gain) on sale of marketable securities                                 (31)                  ---
Equity-based compensation                                                  5,000                   ---
Depreciation and amortization                                                 47                    11
Amortization of intangible assets                                          3,064                   ---
Bad debt expense                                                             100                    90
Deferred income tax provision                                               (495)                  ---

Changes in operating assets and liabilities:
Fees and other receivables                                                (1,905)                  244
Prepaid expenses and other assets                                            (67)                  250
Loans receivable, related parties                                            (63)                 (219)
Accounts payable and accrued expenses                                      2,076                  (301)
                                                                    -----------------      --------------
Net cash provided (used) in operating activities                          (4,458)                  486
                                                                    -----------------      --------------
Cash flows from investing activities:
Proceeds from sale of marketable securities                                3,556                   ---
Investments in partnerships, limited liability
  companies and other interests                                           (1,928)                 (140)
Purchase of furniture and equipment                                         (143)                   (7)
                                                                    -----------------      --------------
Net cash provided (used) by investing activities                           1,485                  (147)
                                                                    -----------------      --------------
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                        18                   ---
                                                                    -----------------      --------------
Net cash provided by financing activities                                  5,718                   ---
                                                                    -----------------      --------------

Net cash used in discontinued operations                                    (111)                  ---
                                                                    -----------------      --------------

Net increase in cash and cash equivalents                                  2,634                   339
Cash and cash equivalents - beginning of period                            1,592                   610
                                                                    -----------------      --------------

Cash and cash equivalents - end of period                                 $4,226                  $949
                                                                    =================      ==============
Supplemental disclosure of cash flow information:
Cash paid:
Interest                                                                     $27                   ---
Taxes                                                                        ---                   $48

Supplemental disclosure of noncash investing and financing
  activities:
Issuance of stock in connection with Global Credit Services, Inc.         $5,025                   ---

See Notes to Consolidated Financial Statements
</TABLE>

                                       5

<PAGE>

                                   THCG, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2000

NOTE 1 - BASIS OF PRESENTATION

         The accompanying  consolidated financial statements as of June 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 most recent audited financial statements included in 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 certain businesses
operated  under the Giza Group  ("Giza")  name in Israel.  This  transaction  is
expected  to close by the end of the third  quarter  and will be  accounted  for
using the  purchase  method  of  accounting.  The  businesses  acquired  are the
investment  banking and equity research  operations of Giza. Upon the closing of
this transaction, THCG will issue 750,000 shares of common stock. The businesses
will be run as THCG Giza  Israel.  Cash  advanced by THCG to Giza to fund Giza's
current operations, which totaled $766 thousand for the three and the six months
ended June 30, 2000, are being expensed as advanced.

NOTE 2 - PARTNERSHIP, LIMITED LIABILITY COMPANY AND OTHER INTERESTS

         THCG owns 100% of the general partner of Walnut Growth  Partners,  L.P.
("WGP").  The general partner owns 1% of WGP and manages WGP's assets, for which
services it is entitled to management  fees and additional  compensation  in the
form of a carried  interest  in 20% of the  profits  of WGP after the  partners'
capital is returned.

         On February 11, 2000, webMethods, Inc. ("webMethods"), 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.  The price of webMethods' stock
has declined to as low as $44.50 per share on April 17, 2000.  On June 30, 2000,
the stock price was $157.1875 per share and, on August 12, 2000, the stock price
was $97.75 per share.

         Because WGP's position in webMethods was subject to a lock-up agreement
and market sentiment  towards Internet  companies had changed,  THCG reduced the
value of its  interest in and  unrealized  profit from the WGP  portfolio in the
first quarter.  As of March 31, 2000, THCG's interest in WGP was valued at $13.8
million,  assuming a webMethods  stock price of  approximately  $100.  Continued
volatility in the price of webMethods stock and the

                                       6

<PAGE>

lock-up agreement restricted WGP's ability to sell its shares of webMethods and,
therefore,  no change was made to the carrying value of WGP's position in THCG's
financial statements as of June 30, 2000.

         Venture I  increased  the  number of its  investments  during the three
months  ended  March 31,  2000.  No new  investments  were made during the three
months  ended June 30,  2000.  As of June 30,  2000,  THCG's  interest  in these
venture  partner  companies  through  Venture I and THCG Partners LLC aggregated
$1.7 million.

NOTE 3 - DISCONTINUED OPERATIONS

         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 of Global
Credit  totaling  approximately  $5.1 million which are being  amortized  over a
seven year period.  Amortization expense of $288 thousand is included in "Equity
in losses of company  accounted  for on the equity  method" in the  accompanying
Consolidated Statements of Operations.

NOTE 5 - SUBSEQUENT EVENTS

         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 or 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.

         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 has agreed to file 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 within 20 business days of the closing and to use its best
efforts  to cause the  registration  statement  to become  effective  as soon as
practicable.  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 90 days (120 days if the SEC reviews the filing)
of August 2, 2000 and is not maintained effective.

                                       7

<PAGE>


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

         We are an active  Internet  and  technology  accelerator  providing  V3
global  enterprise  enhancing  services  -- a  seamless  integration  of venture
development,  venture banking and venture funding services--both to companies in
which we acquire direct or indirect equity interests as well as to third parties
to which we  provide  services  for fees.  We are  penetrating  new  markets  by
developing our international  operations and by expanding our global coverage of
the Internet and technology  sectors.  Our venture partner and venture portfolio
companies include advanced technology and service companies,  established "brick
and  mortar"  companies  implementing  an  Internet-based  strategy  and  global
Internet-based  businesses.  By providing our venture partner companies with our
unique V3  services  offerings,  we  believe  that we help our  venture  partner
companies  focus on their  core  strengths,  so that they may  accelerate  their
development and bring their products and services to market more rapidly.

         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,  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 intend to
acquire  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 six months and the three  months ended June 30, 2000
and the operations of Tower Hill  Securities for the six months and three months
ended June 30, 1999.

Six Months Ended June 30, 2000 as compared to the Six Months Ended June 30, 1999

         Revenues

         Revenues  for the six months  ended June 30,  2000  increased  to $16.5
million from $2.0  million for the six months ended June 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 six months ended June 30, 2000  increased
to $3.3 million  from $1.9  million for the six months ended June 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 $13.2  million for the six months ended June 30,
2000. The increase was due primarily to the $12.3 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 six months ended
June 30, 2000  increased  to $6.7  million  from $1.5 million for the six months
ended June 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 $1.8 million for the six
months ended June 30, 2000 from $629  thousand for the six months ended June 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 six months  ended June 30,  2000  increased  to $1.6  million  from $447
thousand for the six months ended June 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 six
months  ended June 30, 1999.  Consulting  costs  related to venture  development
income were $630  thousand for the six months  ended June 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 pending  acquisition  of Giza,  amounted to $766 thousand
for the six months ended June 30, 2000 (see Note 1 of the Notes to  Consolidated
Financial Statements).

         Equity-based  compensation  expenses  for the six months ended June 30,
2000 were $5.0 million. There were no equity-based compensation expenses for the
six months ended June 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 six months ended June 30,
2000  increased  by  $3.4  million  (including  $288  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.

                                       9

<PAGE>

         Our provision for income taxes from operating income for the six months
ended June 30, 2000  increased to $506  thousand  from $170 thousand for the six
months ended June 30, 1999.  This  increase was primarily due to the increase in
operating  income for the six month period ended June 30, 2000. Our deferred tax
benefit  amounted to $1.0 million for the six months  ended June 30,  2000.  The
deferred tax benefit was the result of a loss from discontinued operations.

         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 six months  ended  June 30,  2000 from
discontinued operations of $5.3 million ($4.3 million after-tax).

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

         Revenues

         Revenues  for the three  months  ended June 30, 2000  increased to $2.2
million from $1.7 million for the three months ended June 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 June 30, 2000 increased
to $1.8 million from $1.7 million for the three months ended June 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 June 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 $375 thousand for the three months ended June 30,
2000 from $16 thousand  for the three  months ended June 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
June 30, 2000  increased  to $3.7 million from $1.0 million for the three months
ended June 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 $949 thousand for the
three months  ended June 30, 2000 from $323  thousand for the three months ended
June 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 June 30, 2000  decreased to $351 thousand from $427 thousand for the three
months ended June 30, 1999. The decrease in professional  fees primarily related
to lower finders fees paid to third parties,  partially offset by 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
June 30, 1999.  Consulting costs related to venture development income were $630
thousand for the three months ended June 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 pending  acquisition  of Giza,  amounted to $766  thousand  for the three
months  ended June 30, 1999 (see Note 1 of the Notes to  Consolidated  Financial
Statements).

         Equity-based  compensation expenses for the three months ended June 30,
2000 were $2.9 million. There were no equity-based compensation expenses for the
three months ended June 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.

                                       10

<PAGE>

         Amortization  of acquired  intangibles  for the three months ended June
30, 2000  increased by $1.8 million  (including  $288  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.

         Our  deferred  tax  benefit  for the three  months  ended June 30, 2000
amounted  to $495  thousand  compared to a  provision  for income  taxes of $158
thousand  for the  three  months  ended  June 30,  1999.  This tax  benefit  was
primarily  due to an  operating  loss in the three  months  ended June 30,  2000
compared to operating income in the three months ended June 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
venture  partner  companies,  to support our  operations  and expand our venture
development  and venture  banking  services,  and to support the  operation  and
growth  of  our  existing   venture  partner   companies.   Our  future  capital
requirements  will  depend  in  large  part on the  number  of  venture  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 changes in the capital markets and investor sentiment,
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  to  execute  our  current
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  redemption 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 Giza. This transaction is expected to close by
the end of the third quarter and will be accounted for using the purchase method
of accounting.  Cash advanced by THCG to Giza to fund Giza's current operations,
which  totaled $766  thousand for the six months ended June 30, 2000,  are being
expensed as  advanced.  We expect that we may fund any  increase in the expenses
for Giza's current  operations.  On August 2, 2000,  THCG issued 5,000 shares of
its  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 six  months  ended June 30,  2000,  cash used in  operating
activities was $4.5 million compared to $486 thousand provided in the six months
ended June 30, 1999.

         Cash  provided by  investing  activities  was $1.5  million for the six
months  ended June 30,  2000  compared to $147  thousand  used in the six months
ended June 30,  1999.  This  consisted  primarily  of proceeds  from the sale of
marketable securities.  We intend to continue to sell marketable securities when
appropriate.

         Cash  provided by  financing  activities  was $5.7  million for the six
months ended June 30, 2000 compared to $0 in the six months ended June 30, 1999.
This  consisted  primarily  of proceeds  from the exercise of the  Warrants.  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
June 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 July 20, 2000,  Tower
Hill opposed  that  motion.  The Court of Appeals has yet to issue a decision on
the motion.

         In addition, 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 a
pre-hearing  conference on July 20, 2000 and scheduled  hearings on September 7,
2000 and October 23-24, 2000.

         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.  Inland, an inactive  subsidiary,  is contesting the petition and is
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 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         (a)      THCG held its annual meeting of stockholders on May 15, 2000.

         (b)      The directors elected at the meeting were:

                                                                        Broker
                        Votes For       Votes Against      Abstain     Non-Votes
                        ---------       -------------      -------     ---------

Joseph D. Mark          9,512,991       4                  5,038          0

Evan M. Marks           9,330,593       182,402            5,038          0

Larry W. Smith          9,330,593       182,402            5,038          0

Stanley B. Stern        9,330,593       182,402            5,038          0


                  Other  directors  whose  terms of office  continued  after the
meeting are as follows: Keith Abell, Gene E. Burleson, Burton W. Kanter, Joel S.
Kanter, Henry Klein and Adi Raviv.


                                       13

<PAGE>

         (c)      Other  matters  voted upon at the  meeting  and the results of
                  those votes are as follows:
<TABLE>
<CAPTION>

                                                     Votes For    Votes Against      Abstain        Broker Non-Votes
                                                     ---------    -------------      -------        ----------------

<S>                                                  <C>          <C>              <C>             <C>
Approval of THCG 2000 Stock Incentive Plan           7,042,112    529,514            3,838          0

Approval of THCG 2000 Employee Stock Purchase Plan
                                                     7,113,262    458,230            3,972          0

Approval of THCG 2000 Non-Employee Director Stock
Option Plan                                          7,330,830    229,920            14,714         0

Approval of the  reincorporation  of THCG in
Delaware  pursuant to the Agreement and Plan of
Merger,  dated April 6, 2000, by and between
THCG and THCG,  Inc., a Delaware corporation and
wholly-owned subsidiary of THCG                      7,823,664    6,593              3,542          0

Ratification of the appointment of Arthur Andersen
LLP as independent auditors for the fiscal year
ending December 31, 2000                             9,508,861    4,923              4,249          0
</TABLE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits

         The following exhibits are filed as part of this report:

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

         2.1                    Agreement  and Plan of  Merger,  dated  April 6,
                                2000,  by  and  between  THCG  and  THCG,   Inc.
                                (incorporated by reference to Exhibit 2.1 of the
                                Current Report on Form 8-K filed with the SEC on
                                May 17, 2000).

         3.1                    Certificate    of    Incorporation    of    THCG
                                (incorporated by reference to Exhibit 3.1 of the
                                Current Report on Form 8-K filed with the SEC on
                                May 17, 2000).

         3.2                    By-laws of THCG  (incorporated  by  reference to
                                Exhibit  3.2 of the  Current  Report on Form 8-K
                                filed with the SEC on May 17, 2000).

         3.3                    Certificate of  Designations  of THCG's Series A
                                Convertible    Participating   Preferred   Stock
                                (incorporated  by  reference  to Exhibit 10.2 of
                                the  Current  Report on Form 8-K filed  with the
                                SEC on August 3, 2000).

         10.1                   Lease Agreement,  dated April 13, 2000,  between
                                THCG  and   500-512   Seventh   Avenue   Limited
                                Partnership.

         27.1                   Financial Data Schedule.

         (b)      Reports on Form 8-K

         THCG filed a Current Report on Form 8-K, dated April 6, 2000,  with the
Securities  and Exchange  Commission  (the "SEC") on April 6, 2000 to report its
replacement of Richard A. Eisner & Company,  LLP as THCG's independent  auditors
under Item 4 ("Changes in Registrant's Certifying Accountant") of said report.

         THCG filed a Current Report on Form 8-K,  dated May 16, 2000,  with the
SEC on May 17, 2000 to report the  reincorporation  of THCG in Delaware pursuant
to the  Agreement  and Plan of Merger,  dated April 6, 2000, by and between THCG
and THCG,  Inc., a Delaware  corporation  and  wholly-owned  subsidiary of THCG,
under Item 5 ("Other Events") of said report.


                                       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 and
                                                 Chief Financial Officer
                                                 (Principal Financial and
                                                 Accounting Officer)

                                         Date:   August 14, 2000

<PAGE>

                                  EXHIBIT LIST

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

2.1               Agreement  and Plan of Merger,  dated  April 6,  2000,  by and
                  between  THCG and THCG,  Inc.  (incorporated  by  reference to
                  Exhibit 2.1 of the  Current  Report on Form 8-K filed with the
                  SEC on May 17, 2000).

3.1               Certificate  of   Incorporation   of  THCG   (incorporated  by
                  reference  to Exhibit  3.1 of the  Current  Report on Form 8-K
                  filed with the SEC on May 17, 2000).

3.2               By-laws of THCG  (incorporated  by reference to Exhibit 3.2 of
                  the  Current  Report on Form 8-K filed with the SEC on May 17,
                  2000).

3.3               Certificate  of  Designations  of THCG's  Series A Convertible
                  Participating  Preferred Stock  (incorporated  by reference to
                  Exhibit 10.2 of the Current  Report on Form 8-K filed with the
                  SEC on August 3, 2000).

10.1              Lease  Agreement,  dated  April  13,  2000,  between  THCG and
                  500-512 Seventh Avenue Limited Partnership.

27.1              Financial Data Schedule.