SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-K/A

                               AMENDMENT NO. 1 TO
              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

For fiscal year ended                                Commission File Number
 December 31, 1999                                           0-5613
------------------                                     ----------------


                         REXX ENVIRONMENTAL CORPORATION
------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

       New York                                         13-2625545
-------------------------------------------------------------------------------
(State or other jurisdiction of               (I.R.S. Employer Identification
 incorporation or organization)                         Number)

                    445 Park Avenue, New York, New York 10022
------------------------------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                                 (212) 750-7755
------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)



Securities registered pursuant to Section 12(g) of the Exchange Act:

                          Common Stock, par value $.02
------------------------------------------------------------------------------
                              (Title of Class)












                                  1 of 13 pages

<PAGE>



ITEM 10.          DIRECTORS AND EXECUTIVE OFFICERS OF THE
                  REGISTRANT.

                  The following table gives certain  information as of April 30,
2000 concerning the Company's directors and executive officers.

      Name            Age     Positions and Offices with REXX           Director
                                                                          Since
      ----             ---     -------------------------------          --------

Arthur L. Asch        58      Chairman of the Board of Directors and      1979
                              Chief Executive Officer.  Member of
                              Executive and Nominating Committees
                              of the Board Of Directors.
Michael A. Asch       33      President, Chief Operating Officer,         1996
                              Treasurer and Chief Financial Officer.
                              Member of the Executive, Compensation
                              and Nominating Committees of the
                              Board of Directors.
Joseph Greenberger    64      Secretary.  Member of the Executive,        1979
                              Nominating, Audit and Stock Option
                              Committees of the Board of Directors.
James L. Hochfelder   55      Member of the Audit, Compensation and       1997
                              Stock Option Committees of the Board
                              of Directors
Brian A. Wasserman    34      Member of the Audit, Compensation and       1997
                              Stock Option Committees of the Board
                              of Directors

         Set forth below are the current positions of the executive  officers of
the Company's Watkins Contracting, Inc. ("Watkins") operating subsidiary.

Name                    Age        Positions and Offices with Watkins
----                    ---        ----------------------------------
Greg S. Watkins         35         President
Daren J. Barone         35         Chief Executive Officer
John Sullivan, III      33         Chief Financial Officer

     Set  forth  below  is a  brief  description  of the  background  of the
executive  officers and directors of REXX and the executive officers of Watkins,
based on information provided by them to REXX.

     Arthur  L.  Asch has been  Chairman  of the  Board of  Directors  and Chief
Executive  Officer of REXX since 1979. Mr. A. Asch served as Chairman of the Oak
Hill Sportswear  Division of Donnkenny  Apparel,  Inc., a clothing and accessory
manufacturer, importer and

                                  2 of 13 pages

<PAGE>



marketer, from July 1995 through December 1997.  Mr. A. Asch is the father of
Michael A. Asch.

     Michael A. Asch has been President,  Chief Operating  Officer and Treasurer
of REXX since  January 1997 and its Chief  Financial  Officer  since March 1994.
From March 1994 through  December  1996, Mr. M. Asch served as Vice President of
REXX.  From July 1995 through  December  1996,  he was Vice  President and Chief
Financial Officer of the Oak Hill Sportswear Division of Donnkenny Apparel, Inc.
Since February 1992, Mr. M. Asch has also served as President and a principal of
Anniston Capital,  Inc., an investment  banking firm. Michael A. Asch is the son
of Arthur L. Asch.

     Daren J. Barone has served as Chief Executive  Officer of Watkins since
November 1997 and as Secretary and Treasurer of Watkins since January 1995.  Mr.
Barone also served as Sales  Manager of Watkins  from  February  1992 to January
1995.

     Joseph  Greenberger has been Secretary of REXX since 1979. Mr.  Greenberger
has been engaged in the practice of law in New York City since 1962.

     James L.  Hochfelder  has been the  President of Beldoch  Industries  Corp.
(women's apparel) for more than the past ten years.

     John Sullivan,  III has served as Chief Financial  Officer of Watkins since
April 1998. Prior to joining Watkins, he served as Chief Financial Officer of TC
Construction Co. for more than five years.

     Brian A. Wasserman is Chief Executive Officer of Wilshire  Investors,  LLC,
Wilshire Louisiana Advisers,  LLC, Wilshire Advisers, LLC and Wilshire Partners,
LLC. He is also currently Chief Executive  Officer of The Whitestone Group, LLC,
which is a full  service  investment  banking  and  venture  capital  firm which
specializes in identifying  and investing in early-stage  growth  opportunities,
fund management, mergers and acquisitions and general corporate finance advisory
consulting.

     From December 1997 until December 1999 Mr.Wasserman was the general partner
of two private venture capital limited partnerships with very diverse public and
private investments.  The partnerships had in excess of $30,000,000 in partners'
capital and  investment  holdings.  From April 1992 through  December  1997, Mr.
Wasserman acted as an investment consultant/analyst for these partnerships. From
December   1997  until   December   1999  Mr.   Wasserman   was  an   investment
consultant/analyst  for two other private venture capital partnerships with very
diverse  public and private  investments.  These  partnerships  had in excess of
$20,000,000 of partners' capital and investment holdings.

     Mr.  Wasserman  previously  founded and was the Chief Financial  Officer of
First


                                  3 of 13 pages

<PAGE>



Lawrence Capital Corp., an investment  banking firm  specializing in mergers and
acquisitions for small to medium-sized  emerging  companies.  From December 1997
until November 1999, Mr. Wasserman served on the board of directors of Heuristic
Development  Group  (now know as  Virtual  Communities  Inc.),  a company  which
engaged in the  development,  marketing,  sale and  licensing of the  Intellifit
System,   a   computerized   system  which   generates   personalized   exercise
prescriptions.  Mr. Wasserman currently serves on the board of directors of REXX
Environmental  Corporation and is also the Managing Member of Sharp  Management,
LLC, a financial consulting company.

     From April 1992 through  September 1998, Mr. Wasserman was the Treasurer of
Engex,  Inc., a closed-end  mutual fund which makes early stage venture  capital
investments in both public and private companies.  The fund generally invests in
high technology,  biotechnology and early stage pharmaceutical  companies.  From
April 1992 through December 1997, Mr. Wasserman acted as chief financial officer
of D.H.  Blair  Investment  Banking  Corp.,  a New York Stock  Exchange and NASD
member firm,  which is an  investment  banking and  merchant  banking firm which
specializes  in public  offerings  and  private  placements  of early  stage and
emerging new companies.  From  September 1987 through April 1992, Mr.  Wasserman
was   an   audit/tax    manager   and   a   staff    investment    analyst   for
PricewaterhouseCoopers  LLP. Mr. Wasserman is a Certified  Public  Accountant in
the state of New York and a member of the American Institute of Certified Public
Accountants and the New York State Society of Certified Public Accountants.

     Greg S. Watkins has served as the  President of Watkins since January 1995.
Prior to his appointment as President of Watkins, he served as its Secretary and
Treasurer  (July 1991 to January 1995) and Vice President  (June 1992 to January
1995).

Directors Compensation

     Directors  who are not  also  officers  or  employees  of REXX  are  paid a
director's  fee of  $10,000  per year.  The only  directors  who  received  this
director's  fee from  REXX for  1999  were  James  L.  Hochfelder  and  Brian A.
Wasserman. In addition, upon joining REXX's board of directors,  each person who
is not an employee of REXX is  automatically  granted under the REXX Option Plan
an option to purchase  15,000  shares of REXX common stock at an exercise  price
per share equal to the then  current per share  market  price of the REXX common
stock.  Messrs.  Hochfelder  and Wasserman were each granted such an option upon
their joining REXX's board of directors in 1997.

Board Meetings and Committees

     During  1999,  REXX's  board of  directors  met  nine  times.  All  current
directors of REXX  attended all of these  meetings of the board and all meetings
of each board committee on which they serve.


                                  4 of 13 pages

<PAGE>



     REXX's board of directors has an Executive Committee, an Audit Committee, a
Compensation Committee, a Nominating Committee and a Stock Option Committee.

     The Executive  Committee has been granted all of the authority which, under
the New York Business  Corporation  Law, may be delegated to this committee.  It
consists of Messrs.  A. Asch, M. Asch and Greenberger.  The Executive  Committee
did not meet during 1999.

     The Audit Committee  recommends the firm of independent  public accountants
to be engaged as REXX's auditors and participates in such accounting  reviews as
it deems  appropriate.  It  consists  of  Messrs.  Greenberger,  Hochfelder  and
Wasserman. The Audit Committee held one meeting during 1999.

     The Nominating  Committee recommends to the Board the slate of nominees for
election  as  directors  of REXX and also  recommends  individuals  for  various
offices with REXX. It consists of Messrs. A. Asch, M. Asch and Greenberger.  The
Nominating  Committee will consider  nominations by shareholders made in writing
to REXX's  Chairman  of the Board.  The  Nominating  Committee  held one meeting
during 1999.

     The Stock Option  Committee is  authorized  to award options under the REXX
Option Plan. It consists of Messrs.  Greenberger,  Hochfelder and Wasserman. The
Stock Option Committee did not meet during 1999.

     The Compensation  Committee is empowered to authorize  executive  officers'
compensation.  It consists of Messrs.  M. Asch,  Hochfelder and  Wasserman.  The
Compensation Committee held one meeting during 1999.

Compensation Committee Interlocks and Insider Participation

     The Compensation Committee of REXX's board of directors consists of Michael
A. Asch, James L. Hochfelder and Brian A. Wasserman.  Anniston Capital,  Inc., a
corporation  controlled  by Michael  A.  Asch,  a REXX  director  and  executive
officer,  paid REXX $7,200 in 1999 for its use of REXX's office  facilities  and
other office expenses.

Section 16(a) Beneficial Ownership Reporting Compliance

     Based  solely  upon a review of Forms 3, 4 and 5, and  amendments  thereto,
furnished to REXX, together with written  representations  received by REXX from
applicable parties that no Form 5 was required to be filed by these parties, all
parties  subject to the reporting  requirements of Section 16(a) of the Exchange
Act filed all these required  reports during and with respect to the 1999 Fiscal
Year.



                                  5 of 13 pages

<PAGE>



ITEM 11.          EXECUTIVE COMPENSATION

         The following  table sets forth,  for the  Company's  fiscal year ended
December  31,  1999 and for the two  prior  fiscal  years,  the  cash and  other
compensation paid to all individuals  serving as REXX's Chief Executive Officer,
or acting in a similar capacity,  during 1999 and all other individuals  serving
as executive  officers of REXX and its Watkins  subsidiary  at December 31, 1999
whose  total  compensation,  for  services  rendered to REXX  during  1999,  was
$100,000 or more.

<TABLE>
<CAPTION>
                                            Summary Compensation Table

                                                                                 Long-Term
                                                                                Compensation
                                                          Annual Compensation      Awards
                                        --------------------------------------  -------------

                                                                  Other Annual   Securities       All Other
Name and Principal Position     Year       Salary         Bonus   Compensation   Underlying     Compensation(3)
----------------------------    ----       ------         -----       (1)        Options (2)
                                                                  ------------   -----------   ---------------
<S>                               <C>        <C>            <C>       <C>           <C>                 <C>

Arthur L. Asch, REXX's          1999    $  37,500 (4)     $ --    $   --             --          $       --
  Chief Executive Officer       1998      225,000 (4)       --        --             --                  --
                                1997       50,000 (4)  120,000        --             --               1,820

Michael A. Asch, REXX's         1999    $  35,833 (5)       --    $   --             --                  --
 Chief Operating Officer        1998      215,000 (5)       --        --            --                   --
                                1997      215,000 (5)       --        --             --               8,400

Greg S. Watkins, Watkin's       1999    $ 180,000 (6)       -- $      --             --          $    1,443
   President                    1998      180,000 (6)       --        --         20,000               1,415

Daren J. Barone, Watkins'       1999    $ 180,000 (6)       -- $      --             --          $    1,500
 Chief Executive Officer        1998      180,000 (6)       --        --         20,000               1,500

</TABLE>

---------
(1)   The value of all perquisites provided did not exceed lesser of $50,000
      or 10% of the  officer's  salary and bonus.

(2)   No options  were granted in the 1999 fiscal year.

(3)  Represents amounts paid under REXX's defined contribution pension and
     profit sharing plans in 1997 and under Watkins'  401(k) Plan in 1998
     and 1999.

(4)  Until July 24, 1995, when the sale of REXX's Sportswear Division was
     consummated, Mr. A. Asch was compensated by REXX at the rate of $500,000
     per year, and he was compensated by the new owner of the Sportswear
     Division from July 25, 1995 through December 31, 1997 at the rate of
     $450,000  per year.  As negotiated in connection with the sale of the
     Sportswear Division, from July 25, 1995 through December 31, 1997,
     Mr. A. Asch was paid regular compensation by REXX at the rate of $50,000
     per year.  Although on January 22, 1998, the Board's Compensation Committee
     authorized compensation to Mr. A. Asch at the rate of $325,000 per year, on
     March 19, 1999, his rate of compensation was reduced to $225,000 a year for
     1998 through February 28, 1999. Mr. A. Asch has agreed that he would be
     paid no compensation by REXX from March 1, 1999 until further Compensation
     Committee action.
(5)  Although on January 22, 1998, the Board's Compensation Committee authorized
     compensation to Mr. M. Asch at the rate of $215,000 per year, on March 19,
     1999, Mr. M. Asch agreed that he

                                  6 of 13 pages

<PAGE>



     would be paid no compensation by REXX from March 1, 1999 until further
     Compensation Committee action.
(6)  See also "Certain Relationships and Related Transactions."


Stock Option Grants in 1999

     No stock options were granted in 1999.

Aggregate Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End
Option/SAR Values

     Set forth in the table below is  information,  with  respect to each of the
individuals listed in the table to the "Executive  Compensation"  section above,
as to:

*         the number of shares  acquired  during 1999 upon each  exercise of
          options granted to these individuals;

*         the aggregate value realized upon each such exercise, calculated as
          the difference between the market value of the shares at exercise and
          their exercise price;

*         the total number of unexercised option held on December 31, 1999,
          separately identified between those exercisable and those not
          exercisable as of such date; and

*         the aggregate value of in-the-money, unexercised options held on
          December 31, 1999, separately identified between those exercisable
          and those not exercisable.


<TABLE>
<CAPTION>

                                                       Number of                   Value of Unexercised
                       Shares                      Unexercised Options             In-the-Money Options
                      Acquired     Value          at December 31, 1999             at December 31, 1999
                                                 --------------------              ---------------------

Name               on Exercise    Realized    Exercisable    Unexercisable    Exercisable     Unexercisable
----               -----------    --------    -----------    -------------    -----------     -------------
<S>                  <C>          <C>             <C>            <C>             <C>                <C>

Arthur L. Asch       -0-           -0-         30,000              0          $   26,250      $          0

Michael A. Asch      -0-           -0-         50,000              0              43,750                 0

Daren J. Barone      -0-           -0-          5,000         15,000               4,375            13,125

Greg S. Watkins      -0-           -0-          5,000         15,000               4,375            13,125


</TABLE>

Employment Agreements

     Watkins has entered  into  employment  agreements  with Daren J. Barone and
Greg S. Watkins. These employment agreements each provide for:

*         base salaries of $180,000 per year;


                                  7 of 13 pages

<PAGE>

*         incentive  compensation equal to 5% of the annual pretax income of
          Watkins above $2,700,000; and

*         additional incentive compensation equal to 2.5% of the annual pretax
          income of Watkins above the greater of Watkins' previous year's pretax
          income or $2,700,000.

     These  employment  agreements  further  provide  that,  if the agreement is
terminated by the executive for good reason, which includes a material breach of
the  employment  agreement or that the  executive be based  outside the original
employment area, he shall be entitled to six months, base salary plus a pro rata
portion  of any  additional  compensation  for  the  year  of  termination.  The
employment  agreements also contain provisions  protecting Watkins'  proprietary
rights and information.

REXX Stock Plans

     On October 11, 1994, REXX's board of directors adopted the REXX Option Plan
covering  up to  199,250  shares of REXX  common  stock.  The REXX  Option  Plan
provides, among other matters, that:

*         the option price per share is to be not less than 50% of the fair
          market value of the stock on the date of the grant;
*         options  granted  shall be for a term of not more than five years and
          shall become exercisable in equal installments in each year of the
          term on a cumulative basis, other than the first year, or to the
          extent that REXX's board of directors shall otherwise determine; and
*         no option may be granted under the REXX Option Plan after October 11,
          2004.

     On April 22, 1996, the REXX board of directors approved an amendment to the
REXX Option Plan,  which was also approved by the REXX  shareholders on June 26,
1996.  This  amendment  provides that the REXX Option Plan is permitted to grant
options to non-employee  directors and provides that each director who is not an
employee of REXX shall receive  options to purchase 15,000 shares of REXX common
stock at the then-  current  market price for the REXX common stock upon joining
the board.

     On  December  3,  1997,  the  REXX  board  of  directors  approved  further
amendments  to the REXX  Option  Plan,  which  were  also  approved  by the REXX
shareholders on February 17, 1998. These amendments provide for:

*         reserving from REXX's authorized but unissued shares of REXX common
          stock 250,000  shares for issuance on exercise of options which may be
          granted under the REXX Option Plan;


                                  8 of 13 pages

<PAGE>



*         increasing the maximum number of shares for which a person may receive
          options under the REXX Option Plan from 100,000 shares to 150,000
          shares of REXX common stock; and
*         adding the incentive to key employees of any business which REXX
          acquires or in which REXX acquires an interest to continue in its
          employ, by the grants of options under the REXX Option Plan to these
          employees, as a purpose of the REXX Option Plan.

     As of March 24, 2000, there were outstanding options granted under the REXX
Option Plan to purchase  230,000 shares of REXX common stock, at exercise prices
ranging from $2.00 to $5.00 per share.

Deferred Compensation Plans

     REXX has  non-contributory  defined contribution pension and profit sharing
plans covering certain employees including its executive officers. Contributions
to these plans ceased  permanently in October 1997 and final  distributions were
made from these  plans in December  1999.  In  addition,  Watkins has a matching
contribution  401(k)  retirement plan covering certain  employees  including its
executive officers.  Neither REXX nor Watkins has a defined benefit or actuarial
plan.

ITEM 12.       SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
               AND MANAGEMENT

     The  following  table sets  forth,  as of March 24,  2000,  the  beneficial
ownership of shares of REXX common stock by:

*         each  person known by REXX to beneficially own 5 or  more of the
          outstanding shares of REXX common stock, based on filings with the
          SEC and certain other information;
*         each director of REXX;
*         each current executive officer of REXX for whom information is given
          in the "Executive  Compensation" section above; and
*         all executive officers and directors of REXX as a group.

     The REXX common stock is the only outstanding class of voting securities of
REXX.  Except as otherwise  indicated,  all shares are  beneficially  owned, and
investment  and voting  power is held by the  persons  named as  owners.  Unless
otherwise  indicated,  the address for each beneficial owner listed in the table
is c/o REXX Environmental Corporation, 445 Park Avenue, New York, New York 10022
and REXX  believes  that all  persons  named in the table  have sole  voting and
investment  power with respect to all shares of REXX common  stock  beneficially
owned by them. A person is deemed to be the beneficial owner of


                                  9 of 13 pages

<PAGE>



securities  which may be acquired by that person  within 60 days from the date
on  which  beneficial  ownership  is to be  determined  upon the  exercise  of
options,   warrants  or  convertible   securities.   Each  beneficial  owner's
percentage ownership is determined by assuming that stock options and warrants
that are held by this  person  (but not those  held by any other  person)  and
which  are  exercisable  within  60 days  from the  date on  which  beneficial
ownership is to be determined have been exercised.


<TABLE>
<CAPTION>


                                            Amount and Nature                                      Percentage
     Name and Address of                     of Common Stock           Amount of Options           Ownership of
     Beneficial Owner                        Directly Owned          Currently Exercisable         Common Stock
-----------------------------------------    ----------------        ---------------------       --------------
<S>                                             <C>                           <C>                      <C>

  Arthur L. Asch........................      396,051 (1)                  30,000                     17.1%

  Daren J. Barone.......................      200,000 (2)                   5,000                      8.3
  c/o Watkins Contracting, Inc.
  8690 Aero Drive, M321
  San Diego, CA  92133

  Greg S. Watkins.......................      100,000                       5,000                      4.2
  c/o Watkins Contracting, Inc.
  8690 Aero Drive, M321
  San Diego, CA  92133

  Michael A. Asch.......................       96,000 (3)                  50,000                      5.8

  James L. Hochfelder...................        5,000                      10,000                        *

  Brian A. Wasserman....................          -0-                      10,000                        *

  Joseph Greenberger....................          -0-                         -0-                      0.0

  All executive officers and directors as a
  group (8 persons).....................        797,051                   115,000(4)                  35.5%

</TABLE>

-----------------------
 *   Less than 1.0%.
(1)  Includes 25,000 shares of REXX common stock held by his spouse, which
     shares Mr. A. Asch disclaims beneficial ownership.
(2)  Mr. Barone assigned these 200,000 shares to Hilltop Investment Co., Inc.,
     an affiliate of Mr. Barone.
(3)  Includes (a) 26,000 shares of REXX common stock held by Mr. M. Asch as
     custodian for his minor children, which shares Mr. M. Asch disclaims
     beneficial ownership and (b) 20,000 shares of REXX common stock held by
     his spouse, which shares Mr. M. Asch disclaims beneficial ownership.
(4)  Includes an additional  5,000 shares of REXX common stock  issuable upon
     exercise of an option granted to another Watkins executive officer under
     the REXX Option Plan which are exercisable within the next 60 days.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Greg S. Watkins and Daren J. Barone are executive officers of Watkins. REXX
acquired Watkins from these individuals in October 1997. The consideration  paid
to Messrs. Watkins and Barone for REXX's acquisition of Watkins included:

*         $3,600,000 in cash;

                                 10 of 13 pages

<PAGE>

*         400,000 shares of REXX common stock; and
*         rights entitling each of them to sell to REXX, at $5.00 per share,
          up to:
*         25,000 shares of REXX common stock per quarter, starting April 1,
          1999, if Watkins earned in excess of $2,700,000 in pretax income
          during 1998, and
*         25,000 shares of REXX common stock per quarter, starting April 1,
          2000, if Watkins earned in excess of $2,700,000 in pretax income
          during 1999.

     Employment  agreements,  each dated October 21, 1997,  between  Watkins and
each of Messrs.  Watkins and Barone were executed in  accordance  with the stock
purchase agreement  pursuant to which REXX purchased  Watkins.  These employment
agreements entitle Mr. Watkins and Mr. Barone to each receive from Watkins:

*         a salary at the rate of $180,000 a year;
*         incentive compensation equal to 5% of the annual pretax income of
          Watkins above $2,700,000; and
*         additional  incentive  compensation equal to 2.5% of the annual pretax
          income of Watkins above the greater of Watkins' previous year's pretax
          income or $2,700,000.

     Pursuant to the terms of a stock  purchase  agreement  dated as of June 10,
1999 Messrs.  Greg S.  Watkins and an assignee of Daren J. Barone will  purchase
all of the shares of Watkins common stock  presently owned by REXX (the "Watkins
transaction").  These shares represent all of the issued and outstanding  common
stock of Watkins.  Accordingly,  upon  completion  of the  Watkins  transaction,
Watkins will be owned solely by the buyers. The purchase price to be paid by the
buyers is:

*         $1,300,000 in cash;
*         the assignment and transfer t REXX of 125,000 shares of REXX common
          stock presently owned by the buyers or the payment of $171,875 in cash
          at buyers' option;
*         Watkins  repayment of a $6,001 inter-company loan due REXX; and
*         the buyers and Watkins using their best efforts to obtain the release
          of REXX and the termination of REXX's obligations under specified
          agreements, guarantees and other instruments, under which REXX
          estimates its potential aggregate liabilities to be approximately
          $7,000,000,  or, if the buyers and Watkins are unable to obtain these
          releases and termination, the buyers shall guarantee and agree to
          indemnify REXX against these potential liabilities.


                                 11 of 13 pages

<PAGE>



     REXX has the  option to have a third  party  purchase  all or a part of the
125,000  shares of REXX common stock that comprise a part of the purchase  price
for  consideration at or above $1.375 per share. If exercised,  the buyers would
sell these  shares to the third  party and  deliver to REXX the net  proceeds of
this sale,  after payment of all  applicable  taxes,  in lieu of delivery of the
shares so sold.

     In addition, the stock purchase agreement provides for Watkins to pay REXX,
upon  closing the Watkins  transaction,  50% of the net recovery by Watkins with
respect  to a claim of  Watkins  against  the  National  Aeronautics  and  Space
Administration in connection with work done by Watkins at a NASA facility.  This
claim was settled for $145,000 and was paid to Watkins in December 1999.

     Anniston Capital, Inc., a corporation controlled by Michael A. Asch, a REXX
director and executive  officer,  paid REXX $7,200 in 1999 for its use of REXX's
office facilities and other office expenses.

     Joseph Greenberger,  a REXX director,  performed certain legal services for
REXX during 1999 and in prior  years.  Mr.  Greenberger  was paid  approximately
$90,000 for legal services rendered in 1999.



                                 12 of 13 pages

<PAGE>


     Pursuant  to the  requirements  of  Section  13 or 15(d) 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.


                                       REXX ENVIRONMENTAL CORPORATION
                                       ------------------------------
                                                   (Registrant)


                                       By: /s/ Arthur L. Asch
                                          -------------------------------------
                                          Arthur L. Asch, Chairman of the Board


                                       Date:  May 1, 2000



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