-----------------------------------------------------------------

                          SECURITIES AND EXCHANGE COMMISSION

                                WASHINGTON, D.C. 20549


                                   ----------------

                                      FORM 10-Q

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

                         FOR THE QUARTER ENDED MARCH 31, 1999

                            COMMISSION FILE NUMBER 0-27190


                           PARAMOUNT FINANCIAL CORPORATION
                (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


                       DELAWARE                          11-3072768
          (State or other jurisdiction of             (I.R.S. Employer
           incorporation or organization)            Identification No.)


               ONE JERICHO PLAZA, JERICHO, NEW YORK             11753
            (Address of principal executive offices)        (zip code)


                                    (516) 938-3400
                 (Registrant's telephone number, including area code)


          INDICATE BY CHECK MARK WHETHER THE REGISTRANT: (1) HAS FILED ALL
          REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE
          SECURITIES EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS
          (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO
          FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING
          REQUIREMENTS FOR THE PAST 90 DAYS. YES    X        NO
                                                ---------      ---------


                    NUMBER OF SHARES OUTSTANDING AT MAY 12, 1999:

             2,160,000 SHARES OF COMMON STOCK, PAR VALUE $0.04 PER SHARE.


          -----------------------------------------------------------------

<PAGE>


                           PARAMOUNT FINANCIAL CORPORATION

                       INDEX TO FORM 10-Q FOR THE QUARTER ENDED

                                    MARCH 31, 1999





          PART I - FINANCIAL INFORMATION                         Page No.
                                                                 --------

           Item 1 - Financial Statements

                    Consolidated Balance Sheets
                    December 31, 1998 and March 31, 1999 .................1


                    Consolidated Statements of Operations
                    Three Months Ended March 31, 1998 and 1999 ............2


                    Consolidated Statement of Changes in
                    Stockholders' Equity Three Months Ended 
                    March 31, 1999 ........................................3


                    Consolidated Statements of Cash Flows
                    Three Months Ended March 31, 1998 and 1999 ............4


                    Notes to Unaudited Consolidated Financial
                    Statements ............................................5

           Item 2 - Management's Discussion and Analysis of
                    Financial Condition and Results of Operations .........6-9



          PART II - Other Information .....................................10


          SIGNATURES ......................................................11


<PAGE>


                            PART I:  FINANCIAL INFORMATION

          ITEM 1.   FINANCIAL STATEMENTS

                   PARAMOUNT FINANCIAL CORPORATION AND SUBSIDIARIES
                   ------------------------------------------------

                             CONSOLIDATED BALANCE SHEETS
                             ---------------------------


                                              DECEMBER 31,     MARCH 31,
                        ASSETS                    1998           1999
                        ------                ------------     ---------
                                                              (UNAUDITED)

           Cash and cash equivalents . . .     $ 1,495,082    $ 1,136,141

           Investments available for sale          613,188        619,898

           Accounts receivable . . . . . .       2,632,258      2,791,919

           Net investment in direct finance
             and sales-type leases . . . .      30,059,378     26,509,086

           Assets held under operating
             leases, net of accumulated          7,263,181      6,301,690
             depreciation  . . . . . . . .

           Other assets  . . . . . . . . .       3,183,523      3,062,480
                                               -----------   ------------

           Total assets  . . . . . . . . .     $45,246,610    $40,421,214
                                               ===========    ===========


                LIABILITIES AND SHAREHOLDERS' EQUITY
                ------------------------------------

           Notes payable . . . . . . . . .     $ 4,313,189    $ 3,942,952

           Accounts payable  . . . . . . .         942,431      1,035,618

           Accounts payable - leases . . .         100,000        297,921

           Accrued expenses  . . . . . . .         658,392        581,211

           Obligations for financed             33,435,459     28,880,152
             equipment - non-recourse  . .      ----------     ----------

           Total liabilities . . . . . . .      39,449,471     34,737,854
                                                ----------     ----------
           Shareholders' equity:

           Preferred stock, $0.01 par
             value; 5,000,000 shares                    --             --
             authorized, none outstanding  

           Common stock, $0.04 par value;
             17,500,000 shares authorized,
             2,160,000 shares issued and
             outstanding, respectively . .          86,400         86,400

           Additional paid-in capital  . .      14,456,728     14,456,728
           Stock subscription receivable .        (812,500)      (812,500)

           Accumulated deficit . . . . . .      (7,882,884)    (7,996,663)

           Treasury stock, 24,500 shares at        (50,605)       (50,605)
             cost  . . . . . . . . . . . .   -------------   ------------

           Total shareholders' equity  . .       5,797,139      5,683,360
                                             -------------   ------------

           Total liabilities and               $45,246,610    $40,421,214
             shareholders' equity  . . . .   =============   ============


                   See accompanying notes to financial statements.

                                        -1-

<PAGE>


                   PARAMOUNT FINANCIAL CORPORATION AND SUBSIDIARIES
                   ------------------------------------------------

                        CONSOLIDATED STATEMENTS OF OPERATIONS
                        -------------------------------------

                         FOR THE THREE MONTHS ENDED MARCH 31,
                         ------------------------------------

                                      UNAUDITED
                                      ---------


                                                  1998          1999
                                               -----------  -----------

           REVENUES:

           Sales . . . . . . . . . . . . .    $ 14,481,462  $5,693,084

           Lease revenue . . . . . . . . .       1,506,328   1,669,886

           Fee, interest and other income          219,927     218,565
                                               ----------- -----------

                          Total revenues .     $16,207,717  $7,581,535
                                               ----------- -----------


           COSTS AND EXPENSES:

           Cost of sales . . . . . . . . .      13,788,191   4,411,628

           Lease expense . . . . . . . . .       1,443,175   1,650,160

           Selling, general and                  1,031,907   1,632,701
             administrative expenses . . .     ----------- -----------

                          Total costs and       16,263,273   7,694,489
                            expenses . . .     ----------- -----------

           Loss before (benefit) provision         (55,556)   (112,954)
             for income taxes  . . . . . .

           (Benefit) provision for income          (22,222)        825
             taxes . . . . . . . . . . . .     ----------- -----------

                Net loss . . . . . . . . .        $(33,334)  $(113,779)
                                              ============ ===========

                Basic loss per                      $(0.02)     $(0.06)
                  common share . . . . . .      =========== ===========

                Diluted loss per                    $(0.02)     $(0.06)
                  common share . . . . . .      =========== ===========

           Shares used in computing net
             income per share:

                Basic  . . . . . . . . . .       1,991,117   2,067,397
                                               =========== ===========

                Diluted  . . . . . . . . .       1,991,117   2,067,397
                                               =========== ===========


                   See accompanying notes to financial statements.

                                     -2-

<PAGE> 


                   PARAMOUNT FINANCIAL CORPORATION AND SUBSIDIARIES
                   ------------------------------------------------

              CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
              ---------------------------------------------------------

                      FOR THE THREE MONTHS ENDED MARCH 31, 1999
                      -----------------------------------------

                                      UNAUDITED
                                      ---------


                                         COMMON STOCK
                                         ------------

                                                               ADDITIONAL
                                                                PAID-IN
                                      SHARES       AMOUNT       CAPITAL
                                      ------       ------      ----------

           BALANCE, DECEMBER 31,  
             1998  . . . . . . .   2,160,000       $86,400   $14,456,728

           Net loss  . . . . . .          --            --            --
                                 -----------   -----------   -----------
           BALANCE, MARCH 31,      
             1999  . . . . . . .   2,160,000       $86,400   $14,456,728
                                 ===========   ===========   ===========


                                 STOCK
                             SUBSCRIPTION     ACCUMULATED    TREASURY
                              RECEIVABLE       (DEFICIT)       STOCK    TOTAL
                              -----------     -----------    --------   -----

     BALANCE, DECEMBER         
       31, 1998  . . . . .     $(812,500)     $(7,882,884) $(50,605) $5,797,139

     Net loss  . . . . . .            --         (113,779)       --    (113,779)
                             -----------      ----------- ---------   ---------
     BALANCE, MARCH 31,                                           
       1999  . . . . . . .     $(812,500)     $(7,996,663) $(50,605) $5,683,360
                             ===========      =========== =========   =========



                   See accompanying notes to financial statements.


                                       -3-
<PAGE>


                   PARAMOUNT FINANCIAL CORPORATION AND SUBSIDIARIES
                   ------------------------------------------------


                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                        -------------------------------------
                         FOR THE THREE MONTHS ENDED MARCH 31,
                         ------------------------------------
                                      UNAUDITED
                                      ---------
                                                       1998        1999
                                                      ------      ------

          CASH FLOWS FROM OPERATING ACTIVITIES:

          Net loss  . . . . . . . . . . . . . . .    $(33,334)  $(113,779)

          Adjustments to reconcile net loss to net
            cash provided by operating activities:

               Depreciation and amortization  . .     803,423   1,172,074

               Amortization of discounts on           (26,953)         --
                 investments  . . . . . . . . . .

          Changes in operating assets and
            liabilities:

                    Accounts receivable . . . . .     (18,847)   (159,661)

                    Other assets  . . . . . . . .      68,582      57,101

                    Accounts payable  . . . . . .    (601,994)     93,187

                    Accrued expenses  . . . . . .    (116,522)    (77,181)
                                                 ------------  ----------

          Net cash provided by operating            
            activities  . . . . . . . . . . . . .      74,355     971,741
                                                 ------------  ----------
          CASH FLOWS FROM INVESTING ACTIVITIES:

               Accounts payable - leases  . . . .     256,295     197,921

               Purchase of equipment for direct    
                 finance leases and sales-type
                 leases . . . . . . . . . . . . .  (5,223,675) (1,821,840) 

               Termination of direct finance        
                 leases . . . . . . . . . . . . .   3,159,587   1,302,442

               Proceeds applied to direct finance   
                 leases and sales-type leases . .   4,158,810   4,069,690

               Purchase of equipment for operating 
                 leases . . . . . . . . . . . . .  (5,110,445)    (96,526)

               Termination of operating leases  .      57,000        (115)

               Residual value sharing arrangements    713,587          --
                                                      
               Payment for acquisitions, net of      
                 cash acquired  . . . . . . . . .    (213,706)    (50,000) 

               Purchases of investments . . . . .  (3,084,593)     (6,710)

               Proceeds from sale/maturity of       
                 investments  . . . . . . . . . .   6,636,003          -- 
                                                 ------------  ----------

          Net cash provided by investing            
            activities  . . . . . . . . . . . . .   1,348,863   3,594,862
                                                 ------------  ----------

          CASH FLOWS FROM FINANCING ACTIVITIES:

               Repurchase of common stock . . . .     (15,586)         --

               Proceeds from notes payable  . . .     817,427     370,718

               Repayment of notes payable . . . .  (1,253,234)   (740,955)

               Increase in non-recourse lease       9,795,722   1,346,264
                 financing  . . . . . . . . . . .

               Termination of non-recourse lease   (2,864,076)   (875,999)
                 financing  . . . . . . . . . . .

               Repayments and interest             
                 amortization applied to  
                 non-recourse lease
                 financing  . . . . . . . . . . .  (4,830,517)  5,025,572)
                                                 ------------  ----------

          Net cash provided by financing            
            activities  . . . . . . . . . . . . .   1,649,736  (4,925,544)
                                                 ------------  ----------

          Net decrease in cash and cash             
            equivalents . . . . . . . . . . . . .   3,072,954     358,941

          CASH AND CASH EQUIVALENTS, beginning of   
            period  . . . . . . . . . . . . . . .   2,209,649   1,495,082
                                                 ------------  ----------

          CASH AND CASH EQUIVALENTS, end of
            period  . . . . . . . . . . . . . . .  $5,282,603  $1,136,141
                                                 ============  ==========

          SUPPLEMENTAL CASH FLOW INFORMATION:

               Cash paid for income taxes . . . .  $   22,120  $   35,830
                                                 ============  ==========

               Cash paid for interest . . . . . .   $ 614,653  $  619,357
                                                 ============  ==========

                   See accompanying notes to financial statements.

                                        -4-
<PAGE>

                   PARAMOUNT FINANCIAL CORPORATION AND SUBSIDIARIES
                  -------------------------------------------------

                 Notes to Unaudited Consolidated Financial Statements
                 ----------------------------------------------------



          1.   The accompanying unaudited consolidated financial statements
               have been prepared in accordance with the instructions for
               Form 10-Q and Regulation S-X related to interim period
               financial statements and, therefore, do not include all
               information and footnotes required by generally accepted
               accounting principles.  However, in the opinion of
               management, all adjustments (consisting of normal recurring
               adjustments and accruals) considered necessary for a fair
               presentation of the financial position of Paramount
               Financial Corporation and subsidiaries (the "Company") at
               March 31, 1999 and its results of operations and cash flows
               for the three months ended March 31, 1998 and 1999,
               respectively, have been included.  The results of operations
               for the interim periods are not necessarily indicative of
               the results that may be expected for the entire year. 
               Reference should be made to the annual financial statements,
               including footnotes thereto, included in the Company s Form
               10-K for the fiscal year ended December 31, 1999.

               The financial statements for the three months ended March
               31, 1999 are consolidated to include the results of the
               Company's two wholly owned subsidiaries, Paratech Resources,
               Inc. ("Paratech") and Deltaforce Personnel Services, Inc
               (the "DeltaGroup").  All material intercompany balances and
               transactions have been eliminated.

          2.   Business Acquisitions
               ---------------------

               On March 3, 1999, Paratech acquired certain assets of Web
               Business Systems, Inc., a privately held New York based web
               hosting and development company, for a total purchase price
               of $80,000.  The acquisition will be accounted for as a
               purchase; accordingly the purchase price will be allocated
               to the underlying assets and liabilities based on their
               respective estimated fair market values at the date of
               acquisition.  The excess of the acquisition costs over the
               fair value of the identifiable net assets will be amortized
               on a straight-line basis over 15 years.  The results of
               operations of Web Business Systems, Inc. have been included
               in the consolidated financial statements commencing with the
               acquisition date.


                                         -5-

<PAGE>

          3.   Segment Information
               -------------------

               The following represents selected financial information for
               the Company's segments for the three months ended March 31,
               1998 and 1999:


                                Paramount    Paratech    DeltaGroup     Total
                                ---------    --------    ----------     -----

     MARCH 31, 1998
     --------------

     Revenues                  $14,315,114  $1,377,223  $  515,380  $16,207,717

     Cost of sales              13,768,001   1,150,846     312,519   15,231,366

     Net income (loss)              72,478    (113,550)      7,738      (33,334)

     Assets                     53,379,868   1,117,518     476,211   54,973,597


     MARCH 31, 1999
     --------------
     Revenues                  $ 3,576,995  $2,410,269  $1,594,271  $ 7,581,535

     Cost of sales               3,131,064   1,906,733   1,023,991    6,061,788

     Net income (loss)             203,689    (128,258)   (189,210)    (113,779)

     Assets                     35,502,200   3,083,032   1,835,982   40,421,414



                                         -6-

<PAGE>

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

               The following discussion should be read in conjunction with,
          and is qualified in its entirety by, the unaudited financial
          statements, including the notes thereto, included elsewhere in
          this Form 10-Q.


          RECENT DEVELOPMENTS

               Paramount Financial Corporation and subsidiaries
          ("Paramount" or the "Company") is a comprehensive business
          solution provider, offering customers a wide range of integrated
          services, including information technology ("IT") consulting,
          network design and implementation, staffing services and lease
          financing.  The Company includes two wholly owned subsidiaries,
          Paratech Resources, Inc. ("Paratech") and Deltaforce Personnel
          Services, Inc. (the "DeltaGroup").  

               The first quarter of 1999 is significant in that it
          reinforces the Company's commitment to Paratech and de-emphasizes
          its lease portfolio.  The Company has made a conscious effort to
          aggressively expand Paratech's services through acquisitions, and
          its client base by partnering with hardware and software vendors,
          as well as expanding its salesforce and aggressively seeking new
          customers.

               On March 3, 1999, Paratech acquired certain assets of Web
          Business Systems, Inc., a privately held New York based web
          hosting and development company, for a total purchase price of
          $80,000.  This acquisition has expanded Paratech s offering of
          services and transformed Paratech into a complete IT solution
          provider.  Paratech now offers IT consulting, network design and
          implementation, Internet development and hosting and accounting
          and salesforce automation solutions.  Paratech intends to be its
          customers' sole source for all IT matters.

               Paratech has aligned itself with vendors such as Xylan,
          Citrix, Security Dynamics, Great Plains and Goldmine to expand
          its customer base.  The Company believes that the relationships
          that it has developed through these vendors will continue to
          provide opportunities to enter into new markets and cross-sell
          its other IT services.

               The DeltaGroup continued to expand its operations and
          penetrate the temporary staffing industry during the three months
          ended March 31, 1999.  The DeltaGroup continues to offer
          temporary and permanent legal support staff, attorney and
          paralegal placements.  The Company plans, through the DeltaGroup,
          to begin offering IT temporary consulting and support staff in
          the second quarter of 1999.

               The Company maintains its lease portfolio and continued to
          selectively engage in leasing transactions during the three
          months ended March 31, 1999.  The Company believes that by acting

                                      -7-

<PAGE>

          as an integrated lessor and business solution provider it is well
          positioned to meet the ever-changing needs of its customers.


          FLUCTUATIONS IN QUARTERLY RESULTS

               The operating results of Paramount are subject to quarterly
          fluctuations resulting from a variety of factors, including the
          volume of new leases written, product announcements by
          manufacturers, economic conditions, interest rate fluctuations
          and variations in the mix of leases written.  In addition, the
          Company s revenue can fluctuate significantly from quarter to
          quarter based on the closing date and nature of each particular
          lease and/or sales transaction.  The mix of leases written in a
          quarter is a result of a combination of factors, including
          changes in customer demands and/or requirements, new product
          announcements, price changes, changes in delivery dates, changes
          in maintenance policies and pricing policies of equipment
          manufacturers and price competition from other lessors.  

               Leasing transactions (other than sales type leases), in
          general, do not provide for significant earnings in the month of
          lease origination.  Instead, revenue, expense and profit from
          lease transactions are recorded over the life of the asset and
          the lease.  Lease revenue and lease expense recognition is
          dependent upon a number of factors, including the term of the
          lease, the accounting classification of the lease (i.e.
          operating, direct finance, or sales type) and the commencement
          date of the lease and the lease financing within a particular
          period.  See "Lease Accounting."

               The Company is aggressively working to maximize the returns
          on the residual value investments made on its lease portfolio. 
          Such efforts, which are an ordinary but not a predictable part of
          the Company's business, often result in equipment originally
          leased under an operating lease, and accounted for as described
          below, being upgraded or otherwise enhanced and extended at the
          original account or leased to a different end-user.  The
          resulting lease may qualify under Statement of Financial
          Accounting Standard No. 13, "Accounting for Leases" ("FAS 13") as
          a sales type lease, in which the Company can record as sales
          revenue the fair market value of the equipment and recognize as
          income the difference between this amount and the equipment's
          cost or net book value.  Since a sales type lease is a form of
          direct finance lease, the new lease is recorded over its
          remaining term as a direct finance lease resulting in a reduction
          of lease rental income and lease expense compared to the original
          operating lease accounting.  

               Marketing efforts may also result in the sale of the leased
          asset to the customer which will result in an increase in
          revenue, and to the extent the sales proceeds exceed the net book
          value, net income, in the quarter in which the sale occurs.  Any
          such sale will also result in a reduction of revenue, expense and
          profit expected in subsequent quarters since the equipment was
          sold.


                                     -8-

<PAGE>

               Given the possibility of such fluctuations as described
          above, the Company believes that comparisons of the results of
          its operations for preceding quarters are not necessarily
          meaningful and that such results for one quarter should not be
          relied upon as an indication of future performance.


          LEASE ACCOUNTING

               In accordance with FAS 13, the Company classifies its leases
          as either operating leases or direct finance leases.  The
          allocation of income among accounting periods within a lease term
          will vary depending upon the lease classification, as described
          below.

               Direct Finance Leases:  Direct finance leases transfer
          substantially all benefits and risks of equipment ownership to
          the lessee.  A lease is a direct finance lease if it meets one of
          the following criteria: (1) the lease transfers ownership of the
          equipment to the lessee by the end of the lease term; (2) the
          lease contains a bargain purchase option; (3) the lease term at
          inception is at least 75% of the estimated economic life of the
          leased equipment; or (4) the present value of the minimum lease
          payments is at least 90% of the fair value of the leased
          equipment at lease inception. 

               At lease inception, the cost of equipment under a direct
          finance lease is recorded as "Net investment in direct finance
          leases".  The difference between the gross lease payments
          receivable, plus the estimated residual value of the equipment,
          and the equipment cost is recognized as income over the life of
          the lease using the effective interest method.

               A lease transaction which meets all of the above criteria,
          and in which the Company has made a dealer's profit, is recorded
          as a sales type lease.  A sales type lease is a type of direct
          finance lease, but one in which the Company recognizes, at lease
          inception, revenue and profit which arises from the difference
          between the fair market value of the leased equipment and its
          acquisition cost.

               Operating Leases:  All lease contracts which do not meet the
          criteria of direct finance leases are accounted for as operating
          leases.  Monthly lease payments are recorded as operating lease
          revenue.  Leased equipment is recorded at the Company's cost and
          depreciated on a straight-line basis over the lease term to the
          estimated residual value at the expiration of the lease term. 


          RESULTS OF OPERATIONS

          THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THREE MONTHS ENDED
          MARCH 31, 1998

               For the three months ended March 31, 1999, the Company
          recorded sales revenue of $7.6 million, a $8.6 million decrease
          over the $16.2 million recorded during the three months ended

                                      -9-

<PAGE>

          March 31, 1998.  The decrease is primarily a result of the
          Company's de-emphasis on its leasing segment.  Paratech's revenue
          in the first quarter of 1999 increased by 71% to $2.4 million as
          compared to $1.4 million recorded in 1997.  The increase in sales
          at Paratech is a result of the Company's aggressive sales and
          marketing focus.  The DeltaGroup, which was purchased in January
          1998, contributed $1.6 million in revenue during the quarter, a
          $1.1 million increase over the $515,000 recorded in 1997.  This
          increase was due to the DeltaGroup's ability to consistently
          provide its customers with well-trained temporary personnel on a
          timely basis.

               As a result of the Company's limited efforts with respect to
          its lease portfolio, certain assets which were recorded as
          operating leases during the first quarter of 1999 have been
          upgraded and re-leased, providing the Company with a return on
          its residual value investment.  The resulting lease has been
          accounted for as a sales type lease.  As a result of this
          activity, the effect of accounting for a lease as a direct
          finance lease versus an operating lease, net of new leases
          written in the first quarter, lease revenue and lease expense
          increased for the three months ended March 31, 1999 by 11% and
          14%, respectively, when compared to the three months ended March
          31, 1998.

               During the three months ended March 31, 1999, the Company
          entered into new lease transactions totaling $1.9 million of
          equipment cost as compared with $10.3 million for the three
          months ended March 31, 1998.  During the quarter ended March 31,
          1999, the Company entered into $1.3 million of non-recourse lease
          financing arrangements, as compared with $9.8 for the three
          months ended March 31, 1998.  See "Liquidity and Capital
          Resources." 

               During the three months ended March 31, 1999, the Company
          generated $219,000 in fee, interest and other income, compared to
          $220,000 for the comparable period last year.  Generally, fee
          income is generated as a result of the Company's involvement in
          certain transactions in which it acted as an arranger of
          financing for leases originated by third parties, or otherwise
          assisted these companies in their lease related transactions. 
          These transactions come about as a result of the Company's
          relationship with other lessors and financial institutions.  The
          Company cannot predict with any certainty the timing and nature
          of any future such transactions.

               Selling, general and administrative expenses totaled $1.6
          million for the three months ended March 31, 1999, representing
          an increase of 58% over the $1.0 million recorded during the
          three months ended March 31, 1998.  This increase is attributable
          to the continued growth and acquisitions of Paratech, which
          contributed $477,000, and the DeltaGroup, which contributed
          $681,000, respectively.  

               The tax provision of $825 for the three months ended March
          31, 1999 reflects the minimum state taxes due.  During the three
          months ended March 31, 1998, the Company recorded a tax benefit
          of $22,000, reflecting the standard tax rate for federal and
          state taxes.

                                     -10-

<PAGE>


               Net loss for the three months ended March 31, 1999 was
          $114,000, after a provision for income taxes of $825, as compared
          with a net loss of $33,000 after a benefit for income taxes of
          $22,000.


          LIQUIDITY AND CAPITAL RESOURCES

               As of March 31, 1999, the Company had $1.3 million in cash
          and cash equivalents and investments available for sale ($450,000
          is restricted, see "Term Loan" below).  Substantially this entire
          amount was invested in interest-bearing savings accounts, money
          market accounts established by major commercial banks or in
          United States Government, other AA rated obligations and mutual
          funds.  Primarily as a result of the continued investment in
          Paratech and the DeltaGroup, its acquisition of Web Business
          Systems, Inc. and the Company s investment in its portfolio of IT
          equipment on lease, the Company experienced a reduction in net
          cash and investments available for sale during the first quarter
          of 1999. 

               The Company continues to use its cash balances to fund its
          operations. In order to expand its operations, which the Company
          is aggressively seeking to accomplish, the Company will need to
          utilize its cash balances to promote internal growth and fund
          potential future acquisitions.  However, the Company is limited
          to its current cash balances for funding such internal growth and
          add-on acquisitions, unless the Company is able in the future to
          raise significant additional financing.  There can be no
          assurance that the Company will be able to raise any such
          financing.  Further, the Company's cash funds for acquisitions
          might be limited to the extent that the Company's current
          operations or the operations of any future acquisitions require
          the funding of losses or the incurrence of capital outlay.   

               The Company's leasing business generates cash primarily from
          the marketing of equipment within its portfolio, and uses cash to
          acquire computer equipment to put on lease.  In addition, the
          Company's leasing business generates cash from fee related
          transactions.   The Company finances substantially all of its
          leases by discounting the payment stream on a non-recourse basis
          through various banks and financial institutions. Thus, the only
          cash required in these lease transactions is the residual value
          investment by the Company.  The Company believes that it
          currently has sufficient resources to make the residual value
          investments required to maintain its lease portfolio.  In
          addition, the Company has numerous options available to finance
          residual value investments, including sales of equipment on lease
          to equipment investors, residual value sharing arrangements,
          recourse loans and non-recourse loans.  The Company intends to
          use, on an opportunistic basis, all such available resources in
          order to maximize its portfolio of equipment on lease.   

          At March 31, 1999, the Company had three types of credit lines
          available:  

          Term Loan:  In April 1998, Paramount entered into a $500,000 term
          loan with a bank collateralized by $600,000 in cash maintained in
          an investment account.  Principal payments of approximately
          $41,600 and interest are due on a quarterly basis through April

                                        -11-

<PAGE>

          20, 2001.  As of March 31, 1999, approximately $375,000 remained
          outstanding under this loan collateralized by $450,000 in cash
          maintained in an investment account.

          The DeltaGroup Revolving Credit Facility:  The DeltaGroup has a
          $750,000 revolving line of credit agreement with a bank secured
          by accounts receivable which expires on June 30, 1999.  Interest
          on outstanding borrowings accrues at the bank's prime rate plus
          1%.  Borrowings are limited to 80% of eligible accounts
          receivable.  As of March 31, 1999, the DeltaGroup had $600,000
          outstanding under this line.  The Company is presently in
          negotiations with two financial institutions to refinance this
          credit facility before its expiration date.

          Paratech Equipment Acquisition Credit Facility:  Paratech has a
          $2,000,000 revolving line of credit agreement with a finance
          company secured by accounts receivable and inventory.  Interest
          on outstanding borrowings accrues at the prime rate plus 1-1/2%. 
          Borrowings are limited to 85% of eligible accounts receivable and
          99% of eligible inventory. This facility allows the Company to
          purchase computer hardware from its vendors with net 30-day terms
          interest free.  At the expiration of the net 30-day period, the
          Company has the option of paying the amount due or, provided the
          Company has sufficient eligible collateral, borrowing under the
          credit facility.  As of March 31, 1999, Paratech had $565,000
          outstanding under this line.  

               The Company believes that cash generated from operations,
          amounts available under its credit facilities, and/or other third
          party financing will be sufficient to fund necessary capital
          expenditures and to provide adequate working capital for at least
          the next 12 months.  There can be no assurance, however, that the
          Company will not require additional financing prior to such date
          to fund its operations, if required, that such financing will be
          available on commercially reasonable terms. In addition, the
          Company may require additional financing after such date to fund
          its operations.


          IMPACT OF YEAR 2000 ISSUE

               Many existing computer programs use only two digits to
          identify a year.  These programs were frequently designed and
          developed without addressing the impact of the upcoming change in
          the century.  If not corrected, many computer software
          applications could fail or create erroneous results before, at or
          beyond the Year 2000.  

               The Company has developed a Year 2000 Readiness Plan. This
          plan addresses three main areas: (a) information technology
          systems (including the Company's business systems, both hardware
          and software related), (b) non-information technology systems
          (including embedded technology such as microcontrollers,
          typically found in such equipment as telephone systems, fax
          systems, elevators, security systems, HVAC, etc.) and (c) supply
          chain readiness or third party issues (including customers as
          well as inventory and non-inventory suppliers).

                                   -12-

<PAGE>

               The Company has not identified any material potential
          deficiencies related to Year 2000 in its information technology
          systems.  The Company's has upgraded its business and computing
          system in 1997 and it is now Year 2000 compliant (according to
          the Company's software providers). The Company expects to
          complete remediation and testing of its internal systems in the
          second quarter of 1999. In terms of non-information technology
          systems, the Company will be identifying those material items
          which may require remediation or replacement. The Company is in
          the process of addressing those items and expects to complete
          remediation or replacement and testing of its non-information
          technology systems in the second quarter of 1999. As for third
          parties, the Company is in the process of identifying and
          contacting suppliers, both inventory and non-inventory, as well
          as customers. This process includes the solicitation of written
          responses to questionnaires and/or meetings with certain third
          parties. The Company expects to have a better understanding of
          the Year 2000 readiness of these third parties by the end of the
          third quarter.

               Based upon the Company's current estimates, additional
          out-of-pocket costs associated with its Year 2000 compliance are
          not expected to be material. These costs are anticipated to be
          incurred primarily in 1999 and include third party consultants,
          remediation or replacement of embedded chips. Such costs do not
          include internal management time and the deferral of other
          projects, the effects of which are not expected to be material to
          the Company's results of operations or financial condition.

               At this point in time, the Company believes that it is
          difficult to specifically identify the cause of the most
          reasonable worst case Year 2000 scenario. As with all businesses,
          a reasonable worst case scenario would be the result of failures
          of third parties (including, without limitation, governmental
          entities and entities with which the Company has no direct
          involvement) that continue for more than several days in specific
          industries from which the Company's inventory and components are
          sourced or to which the Company's products are sold. In
          connection with the purchase of inventory and components, the
          Company is considering various contingency plans. Continuing
          failures in these specific industries would limit procurement or
          delivery of product, and most likely would have a material
          adverse effect on the Company's results of operations. The extent
          of such lost revenue cannot be estimated at this time; however,
          the Company is considering contingency plans to limit, to the
          extent possible, the effect of such lost revenue on the Company's
          result of operations. Any such plans would necessarily be limited
          to matters over which the Company can reasonably control. 

               The Company's Year 2000 efforts are ongoing and its overall
          plan, as well as the consideration of contingency plans, will
          continue to evolve as new information becomes available. While
          the Company anticipates continuity of its business activities,
          that continuity will be dependent upon its ability, and the
          ability of third parties with whom the Company relies on
          directly, or indirectly, to be Year 2000 compliant. 

                                    -13-

<PAGE>


          FORWARD LOOKING STATEMENTS AND ASSOCIATED RISK

               Statements contained in this Form 10-Q which are not
          historical facts are forward-looking statements.  The
          forward-looking statements in this Form 10-Q are made pursuant to
          the safe harbor provisions of the Private Securities Litigation
          Reform Act of 1995.  Forward-looking statements made herein
          contain a number of risks and uncertainties that could cause
          actual results to differ materially.  These risks and
          uncertainties include, but are not limited to, the specific
          factors impacting the Company's business discussed under the
          caption "General", as well as increased competition; the
          availability of computer equipment; the ability of the Company to
          expand its operations and attract and retain qualified sales
          representatives experienced in the purchase, sale and lease of
          new and used computer equipment; the ability of the Company to
          attract and retain IT professionals skilled in specific
          applications; technological obsolescence of the Company's
          portfolio of computer equipment; competition in the IT consulting
          sector and general economic conditions.


          ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET
                    RISK

               "Quantitative and Qualitative Disclosure about Market Risk",
          on page 25 of the Company's annual report (form 10-K) is
          incorporated herein by reference.  No material changes have
          occurred from the disclosure in form 10-K through the three
          months ended March 31, 1999.

                                       -14-

<PAGE>

                             PART II:  OTHER INFORMATION



          ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

                    (a)  Exhibits.
                         --------

                         27.  Financial Data Schedule.

                    (b)  Reports on Form 8-K.
                         -------------------

                         None.


                                    -15-

<PAGE>


                                      SIGNATURES


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


                                        PARAMOUNT FINANCIAL CORPORATION



          Date:  May 13, 1999           By:    /s/ Glenn Nortman    
                                             --------------------------
                                                Glenn Nortman, Chief
                                                  Executive Officer


                                     -16-




<PAGE>

                                 EXHIBIT INDEX



             Exhibit        Description
             -------        ------------
               27           Financial Data Schedule.