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 March 31, 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)


                Utah                                            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 May 9, 2000,  there were  12,649,669  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  March 31, 2000 (unaudited) and
            December 31, 1999.............................................   2

            Consolidated Statements of Operations - for the
            three months ended March 31, 2000 (unaudited)
            and March 31, 1999 (unaudited)................................   3

            Consolidated Statement of Changes in
            Stockholders' Equity - for the three months
            ended March 31, 2000 (unaudited) .............................   4

            Consolidated Statements of Cash Flows - for the
            three months ended March 31, 2000 (unaudited) and
            March 31, 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....  10

PART II. OTHER INFORMATION

Item 1.     Legal Proceedings.............................................  11

Item 6.     Exhibits and Reports on Form 8-K..............................  11

<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 7 hereof as set forth below:


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

Consolidated Statements of Operations - for the three months
ended March 31, 2000 (unaudited) and March 31, 1999 (unaudited)...........   3

Consolidated Statement of Changes in Stockholders' Equity -
for the three months ended March 31, 2000 (unaudited) ....................   4

Consolidated Statements of Cash Flows - for the three months
ended  March 31, 1999 (unaudited) and March 31, 2000  (unaudited).........   5

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

                                       1

<PAGE>

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>

                                                                                  March 31,                December 31,
                                                                                   2000                        1999
                                                                                (unaudited)
                                                                              ------------------------------------------
ASSETS
<S>                                                                              <C>                        <C>
  Marketable and nonmarketable securities                                        $11,032,000                $7,863,000
  Partnership, limited liability company and other interests                      15,433,000                 2,053,000
  Cash and cash equivalents                                                        6,552,000                 1,592,000
  Fees and other receivables, net of allowance                                       793,000                   352,000
  Prepaid expenses and other assets                                                  262,000                   279,000
  Loan receivable, related party                                                     223,000                    35,000
  Loan receivable, officer                                                           366,000                   277,000
  Furniture, fixtures and equipment - at cost, less accumulated depreciation          77,000                   104,000
  Excess of cost over fair value of net assets acquired, net of
   accumulated amortization                                                       27,734,000                29,266,000
  Assets of discontinued operations                                                     ----                 6,537,000
                                                                              ---------------            -------------
   Total Assets                                                                  $62,472,000               $48,358,000
                                                                              ===============            =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable, accrued expenses and others                                   $1,076,000                  $131,000
  Liabilities of discontinued operations                                           1,000,000                 2,967,000
  Deferred income taxes payable                                                    1,916,000                   495,000
                                                                              ---------------            -------------
   Total Liabilities                                                               3,992,000                 3,593,000
                                                                              ---------------            -------------
Stockholders' equity
  Common stock,  $.01 par value,  50,000,000 shares  authorized;  12,603,969 and
   11,751,113 issued and outstanding at March 31, 2000 and December 31,
   1999, respectively                                                                126,000                   118,000
  Additional paid-in capital                                                      94,281,000                81,601,000
  Accumulated deficit                                                             (8,760,000)               (9,660,000)
  Unearned compensation                                                          (27,167,000)              (27,294,000)
                                                                              ---------------            -------------
   Total Stockholders' equity                                                     58,480,000                44,765,000
                                                                              ---------------            -------------
   Total Liabilities and Stockholders' Equity                                   $ 62,472,000              $ 48,358,000
                                                                              ===============            =============

See Notes to Consolidated Financial Statements
</TABLE>

                                       2

<PAGE>
<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                       Three Months Ended
                                                           -------------------------------------------
                                                                   March 31,            March 31,
                                                                        2000               1999
                                                                 (unaudited)           (unaudited)
                                                           --------------------      -----------------
REVENUES
<S>                                                            <C>                    <C>
Venture service fees                                           $   1,483,000          $    266,000
Appreciation in securities and interest income                    12,812,000                    --
                                                               -------------          ------------
    Total Revenues                                                14,295,000               266,000

EXPENSES
Selling, general and administrative                                3,007,000               503,000
Equity-based compensation                                          2,087,000                    --
Amortization of acquired intangibles                               1,532,000                    --
                                                               -------------          ------------
    Total Expenses                                                 6,626,000               503,000

Income (loss) before discontinued operations and taxes             7,669,000              (237,000)
Provision for income taxes                                         3,583,000                12,000
                                                               -------------          ------------
Net income (loss) before discontinued operations                   4,086,000              (249,000)
Net (loss) from discontinued operations                           (3,186,000)                   --
                                                               -------------          ------------
Net income (loss)                                              $     900,000          $   (249,000)
                                                               =============          ============
BASIC EARNINGS PER SHARE
Basic income (loss) per share from continuing operations       $        0.34          $      (0.07)

Basic (loss) per share from discontinued operations                    (0.27)                   --
                                                               -------------          ------------
Basic income (loss) per share                                  $        0.07          $      (0.07)
                                                               =============          ============
DILUTED EARNINGS PER SHARE
Diluted income (loss) per share from continuing operations     $        0.27          $      (0.07)

Diluted (loss) per share from discontinued operations                  (0.21)                   --
                                                               -------------          ------------
Diluted income (loss) per share                                $        0.06          $      (0.07)
                                                               =============          ============

Basic weighted average common shares outstanding                  12,139,524             3,723,000
                                                               =============          ============
Diluted weighted average common shares outstanding                15,374,696             3,723,000
                                                               =============          ============

See Notes to Consolidated Financial Statements
</TABLE>

                                       3

<PAGE>

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>

                                                        Common Stock                  Additional
                                             ------------------------------------
                                                 Number of                             Paid-in            Unearned
                                                  Shares             Amount            Capital          Compensation
                                             ------------------  ----------------  -----------------   ----------------
<S>                                            <C>                 <C>             <C>              <C>
BALANCE, DECEMBER 31, 1999                          11,751,113          $118,000        $81,601,000      $(27,294,000)

Proceeds from exercise of warrants for
    common stock                                       633,373             6,000          5,694,000
Proceeds from exercise of options for
    common stock                                         1,000                                3,000
Issuance of common stock in connection
    with investment                                    218,483             2,000          5,023,000
Unearned compensation for stock options
    issued to employees                                                                   1,960,000        (1,960,000)
Amortization of unearned compensation                                                                       2,087,000
Net income
                                             ------------------  ----------------  -----------------   ----------------
BALANCE, MARCH 31, 2000 (UNAUDITED)                 12,603,969          $126,000        $94,281,000     $ (27,167,000)
                                             ==================  ================  =================   ================

                                                                         Accumulated
                                                                           Deficit            Total
                                                                       ---------------     -------------
BALANCE, DECEMBER 31, 1999                                              $(9,660,000)        $44,765,000

Proceeds from exercise of warrants for
     common stock                                                                             5,700,000
Proceeds from exercise of options for
     common stock                                                                                 3,000
Issuance of common stock in connection
     with investment                                                                          5,025,000
Unearned compensation for stock options
     issued to employees                                                                             --
Amortization of unearned compensation                                                         2,087,000
Net income                                                                  900,000             900,000
                                                                       --------------      -------------
BALANCE, MARCH 31, 2000 (UNAUDITED)                                     $(8,760,000)        $58,480,000
                                                                       ==============      =============

See Notes to Consolidated Financial Statements
</TABLE>

                                              4

<PAGE>
<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                       For the three months ended
                                                                         March 31,      March 31,
                                                                           2000           1999
                                                                        (unaudited)    (unaudited)
                                                                        -----------   -----------
Cash flows from operating activities:
<S>                                                                   <C>               <C>
Net income (loss)                                                    $    900,000       $(249,000)
Adjustment to reconcile net income (loss) to net cash used in
continuing operating activities-
Loss from discontinued operations                                       3,186,000
Net change in unrealized appreciation of investments                  (12,632,000)
Gain on sale of marketable securities                                       1,000
Equity-based compensation                                               2,087,000
Depreciation and amortization                                              41,000           4,000
Amortization of intangible assets                                       1,532,000
Bad debt expense                                                          201,000
Deferred income tax provision                                           1,421,000

Changes in operating assets and liabilities:
Fees and other receivables                                               (642,000)        200,000
Loan receivable-officer                                                   (89,000)
Prepaid expenses and other assets                                          17,000        (199,000)
Due from related parties                                                 (188,000)
Accounts payable and accrued expenses                                   1,945,000        (181,000)
                                                                     ------------       ---------
Net cash used in operating activities                                  (2,220,000)       (425,000)
                                                                     ------------       ---------
Cash flows from investing activities:
Proceeds from sale of marketable securities                             2,903,000
Investments                                                            (1,385,000)
Purchase of furniture and equipment                                       (14,000)
                                                                     ------------       ---------
Net cash provided by investing activities                               1,504,000              --
                                                                     ------------       ---------
Cash flows from financing activities:
Proceeds from the exercise of warrants for common stock                 5,700,000
Proceeds from the exercise of options for common stock                      3,000
                                                                     ------------       ---------
Net cash provided by financing activities                               5,703,000              --
                                                                     ------------       ---------
Net cash used in discontinued operations                                  (27,000)
                                                                     ------------       ---------
Net increase (decrease) in cash and cash equivalents                    4,960,000        (425,000)
Cash and cash equivalents - beginning of period                         1,592,000         610,000
                                                                     ------------       ---------
Cash and cash equivalents - end of period                            $  6,552,000       $ 185,000
                                                                     ============       =========
Supplemental disclosure of cash flow information:
   Cash paid:
      Interest                                                                 --              --
      Taxes                                                                    --         $48,000
Supplemental disclosure of noncash investing and financing activities
   Issuance of stock in connection with Global Credit Services, Inc.   $5,025,000              --

See Notes to Consolidated Financial Statements
</TABLE>

                                       5

<PAGE>

                                   THCG, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2000

NOTE 1 - BASIS OF PRESENTATION

         The accompanying consolidated financial statements as of March 31, 2000
are unaudited;  however,  in the opinion of the management of THCG, Inc., a Utah
corporation (the "Company" or "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 the
Company'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 the Company  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  the  Company  whose   operations   have  been
discontinued. See Note 3 to Notes to Consolidated Financial Statements.

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  limited
partner's capital is returned.

         On February 11, 2000, webMethods, Inc. ("webMethods"), a company in the
WGP portfolio,  issued stock to the public.  The price of webMethods'  stock has
been  extremely  volatile.  On March 31,  2000,  the stock price was $241.38 per
share.  Subsequently,  the stock of webMethods and other Internet  companies was
negatively  impacted by a change in market  sentiment.  The price of webMethods'
stock declined to as low as $44.50 per share on April 17, 2000.

         Given  that the WGP  position  in  webMethods  is  subject to a lock-up
agreement and that market sentiment towards Internet companies has changed, THCG
has reduced  the value of its  interest  in and  unrealized  profit from the WGP
portfolio.  As of March 31,  2000,  THCG's  interest  in WGP was valued at $13.8
million,  assuming a webMethods  stock price of  approximately  $100. This value
reflects a permanent impairment of $20.4 million.

         Venture I  increased  the  number of its  investments  during the first
quarter.  As of  March  31,  2000,  THCG's  interest  in these  venture  partner
companies through Venture I and THCG Partners LLC aggregated $1.7 million.

                                       6

<PAGE>

         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 of accounting.

NOTE 3 - DISCONTINUED OPERATIONS

         Two of THCG's  subsidiaries,  Pacific  Financial and Inland  Financial,
engage in the factoring business in the state of Washington.  THCG has completed
a  strategic  review  and has  concluded  that  the  factoring  business  is not
consistent with THCG's current focus and corporate objectives. Accordingly, THCG
is winding down the operations of these two  subsidiaries  and has accounted for
these businesses as discontinued operations.
<TABLE>
<CAPTION>

                                                                                           Total Discontinued
                                           Inland Financial       Pacific Financial            Operations
                                           ----------------       -----------------        ------------------
<S>                                             <C>                     <C>                     <C>
Total Assets                                    $1,988,000              $4,549,000              $6,537,000
Total Liabilities                                  770,000               2,197,000               2,967,000
                                                ----------              ----------              ----------
Net Assets                                      $1,218,000              $2,352,000              $3,570,000
                                                ==========              ==========              ==========
</TABLE>

NOTE 4 - SUBSEQUENT EVENTS

         On April 11, 2000, THCG announced the acquisition of certain businesses
operated  under the Giza Group ("Giza")  name.  This  transaction is expected to
close by June 30, 2000 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.


                                       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  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  in  exchange  for fees.  We are  penetrating  new  markets by
developing our international  operations and by expanding our global coverage of
the  Internet  industry.  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 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.

         The  financial   statements   contained  in  this  Report  reflect  the
operations of THCG for the three months ended March 31, 2000 and the  operations
of Tower Hill Securities for the three months ended March 31, 1999.

                                       8

<PAGE>

Three  Months  Ended March 31, 2000 as compared to the Three  Months Ended March
31, 1999

Revenues

         Revenues for the three  months ended March 31, 2000  increased to $14.3
million  from $266  thousand  for the three  months  ended March 31,  1999.  The
increase  in revenues  was  primarily  due to  significant  appreciation  of our
venture  partner and  venture  portfolio  company  securities  portfolio  and an
increase in the sales of our venture banking services.

         Venture  service  fees  for the  three  months  ended  March  31,  2000
increased to $1.5  million  from $266  thousand for the three months ended March
31, 1999.  The increase in these fees was  primarily  due to an increase in fees
earned from providing our venture banking services.

         Appreciation  in  securities  and interest  income  consists 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.  Appreciation  in  securities  was $12.8
million  for the  three  months  ended  March 31,  2000.  The  increase  was due
primarily  to the $12.3  million  increase  in the  value of assets  held by our
wholly owned  subsidiary that is the general partner of WGP. See Note 2 to Notes
to Consolidated  Financial Statements.  Tower Hill Securities was not engaged in
these activities during the comparable period in 1999.

Expenses

         Selling, general and administrative expenses for the three months ended
March 31, 2000 increased to $3.0 million from $503 thousand for the three months
ended  March  31,  1999.   The  increase  was  primarily  due  to  increases  in
compensation  and related  benefits  and  professional  fees.  Compensation  and
related  benefits  expense  increased  to $1 million for the three  months ended
March 31, 2000 from $306  thousand  for the three  months  ended March 31, 1999.
Compensation  expenses included bonuses to professionals related to the improved
results from our venture banking  services,  as well as our hiring of additional
employees to provide venture  development  and venture  banking  services to our
venture partner  companies.  Professional  fees for the three months ended March
31, 2000  increased to $1.3 million from $20 thousand for the three months ended
March 31, 1999. The increase in professional fees primarily related to 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 prior to 1999.

         Equity-based compensation for the three months ended March 31, 2000 was
$2.1 million. There was no equity-based  compensation for the three months ended
March 31, 1999.

         Amortization  for the three  months  ended March 31, 2000  increased to
$1.5 million  from $7 hundred for the three  months  ended March 31,  1999.  The
increase in amortization  expenses is primarily  related to the  amortization of
goodwill from our merger with Walnut Financial  Services on November 1, 1999 and
the acquisition of Mercury Coast on December 29, 1999.

         Our  provision  for income  taxes for the three  months ended March 31,
2000  increased  to $3.6  million  from $12  thousand for the three months ended
March 31, 1999.  This  increase was  primarily due to the increase in net income
for the three month period ended March 31, 2000.

         We  incurred  a loss in the three  months  ended  March  31,  2000 from
discontinued operations of $5.4 million ($3.2 million after-tax).  We decided to
discontinue the accounts receivable  factoring business.  See Note 3 to Notes to
Consolidated Financial Statements.

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 venture partner  companies.  Our future capital  requirements will
depend in large  part on the  number of venture  partner  companies  in

                                       9

<PAGE>

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 will
end on August 6, 2000.

         During the three months  ended March 31,  2000,  cash used in operating
activities was $2.2 million compared to $425 thousand for the three months ended
March 31, 1999.

         Cash  provided by financing  activities  was $5.7 million for the three
months  ended March 31, 2000  compared to none for the three  months ended March
31,  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.

         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 $350,000.

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 the
venture  development  and  venture  banking  services it provides to its venture
partner companies.  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. As THCG develops its
international  operations  and  expands  its  global  coverage  of the  Internet
industry,  THCG's  risk  of  foreign  currency  exchange  rate  fluctuation  may
dramatically  increase.  Therefore,  in the future,  THCG may consider utilizing
derivative instruments to mitigate these risks.


                                       10

<PAGE>

                                     PART II

                                OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         With respect to the action  brought  against  Tower Hill  Securities 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.  Tower Hill Securities opposed
the motion on April 24, 2000. As of May 15, 2000, no decision has been issued on
Mr. Bitter's motion.

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               The 2000 THCG, Inc. Stock Incentive Plan.

                  10.2               The THCG, Inc. 2000 Employee Stock Purchase
                                     Plan.

                  10.3               The THCG, Inc. 2000  Non-Employee  Director
                                     Stock Option Plan.

                  27.1               Financial Data Schedule.


         (b)      Reports on Form 8-K

         THCG filed a Current Report on Form 8-K, dated December 29, 1999,  with
the SEC on January 6, 2000 to report its acquisition of Mercury Coast under Item
2  ("Acquisition  or  Disposition  of  Assets")  of said  report.  THCG filed an
amendment to the Current Report on Form 8-K,  dated December 29, 1999,  with the
SEC on March 13, 2000 to report the historical  financial  statements of Mercury
Coast and the pro forma  financial  statements  of THCG under Item 7 ("Financial
Statements, Pro Forma Financial Information and Exhibits") of said report.


                                       11

<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/ Shai Novik
                                                  ---------------------------
                                               Name:  Shai Novik
                                               Title: Chief Operating Officer
                                                      and Principal Financial
                                                      and Accounting Officer
                                               Date: May 15, 2000

<PAGE>

                                  EXHIBIT LIST

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

10.1               The 2000 THCG, Inc. Stock Incentive Plan.

10.2               The THCG, Inc. 2000 Employee Stock Purchase Plan.

10.3               The THCG, Inc. 2000 Non-Employee Director Stock Option Plan.

27.1               Financial Data Schedule.