SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549



                                   FORM 10-K/A
                                (Amendment No. 2)

(Mark One)


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

For the fiscal year ended September 30, 1999
                          ------------------

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


For the transition period from __________ to _______________


                         Commission file number 0-24928
                                                -------

                           THE SOLOMON-PAGE GROUP LTD.
--------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)


                Delaware                                51-0353012
--------------------------------------------------------------------------------
    (State or other jurisdiction of            (IRS Employer Identification
    incorporation or organization                       Number)


              1140 Avenue of the Americas, New York, New York 10036
--------------------------------------------------------------------------------
              (Address of Principal Executive Offices)     (Zip Code)

       Registrant's telephone number, including area code: (212) 403-6100
                                                           --------------

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

                                      None

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

                          Common Stock, par value $.001

                         Common Stock Purchase Warrants


         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 / /


<PAGE>

         Check if there is no  disclosure  of  delinquent  filers in response to
Item 405 of  Regulation  S-K contained in this form,  and no disclosure  will be
contained,  to the best of the  Registrant's  knowledge,  in definitive proxy or
information  statements  incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. / /

         The aggregate  market value of the voting stock held by  non-affiliates
of the Registrant computed by reference to the price at which the stock was sold
on December 17, 1999 was  approximately  $5,093,064.  Solely for the purposes of
this  calculation,  shares held by directors and officers of the Registrant have
been  excluded.  Such  exclusion  should  not be  deemed a  determination  or an
admission by the Registrant that such  individuals  are, in fact,  affiliates of
the Registrant.

         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock, as of the latest practicable date: At January 20, 2000,
there were outstanding  4,153,948 shares of the Registrant's Common Stock, $.001
par value.




<PAGE>

                                     PART II

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                   THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY

                          INDEX TO FINANCIAL STATEMENTS



                                                                          Page


Independent Auditor's Report ...............................................F-2

Consolidated Balance Sheets as of September 30, 1999 and 1998...............F-3

Consolidated Statements of Operations for the years ended
September 30, 1999, 1998 and 1997...........................................F-5

Consolidated Statements of Stockholders' Equity for the years ended
September 30, 1999, 1998 and 1997...........................................F-6

Consolidated Statements of Cash Flows for the years ended
September 30, 1999, 1998 and 1997...........................................F-7

Notes to Consolidated Financial Statements .................................F-9




                                       F-1


<PAGE>


                          INDEPENDENT AUDITOR'S REPORT


To the Stockholders and Board of Directors of
   The Solomon-Page Group Ltd.



         We have audited the  accompanying  consolidated  balance  sheets of The
Solomon-Page  Group Ltd. and  subsidiary as of September 30, 1999 and 1998,  and
the related  consolidated  statements of operations,  stockholders'  equity, and
cash flows for each of the three fiscal years in the period ended  September 30,
1999. These  consolidated  financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
consolidated financial statements based on our audits.

         We conducted our audits in accordance with generally  accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable  assurance about whether the  consolidated  financial  statements are
free of material  misstatement.  An audit includes  examining,  on a test basis,
evidence  supporting the amounts and disclosures in the  consolidated  financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
consolidated  financial  statement  presentation.  We  believe  that our  audits
provide a reasonable basis for our opinion.

         In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
The  Solomon-Page  Group Ltd. and  subsidiary as of September 30, 1999 and 1998,
and the  consolidated  results of their operations and their cash flows for each
of the three fiscal years in the period ended  September 30, 1999, in conformity
with generally accepted accounting principles.





                                                   /s/ MOORE STEPHENS, P. C.
                                                   -------------------------
                                                   MOORE STEPHENS, P. C.
                                                   Certified Public Accountants.

Cranford, New Jersey
November 16, 1999

                                       F-2
<PAGE>

THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY


CONSOLIDATED BALANCE SHEETS
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]

<TABLE>
<CAPTION>

                                                                                                                 September 30,
                                                                                                           1 9 9 9          1 9 9 8
Assets:
Current Assets:
<S>                                                                                                       <C>                <C>
   Cash and Cash Equivalents                                                                              $   580            $   935
   Investments                                                                                                849                603
   Accounts Receivable - [Net of Allowances of $280 and $200,
      Respectively]                                                                                        11,416             10,161
   Other Current Assets                                                                                       391                246
                                                                                                          -------            -------
   Total Current Assets                                                                                    13,236             11,945
                                                                                                          -------            -------
Property and Equipment:
   Equipment                                                                                                2,022              1,727
   Furniture and Fixtures                                                                                     797                563
   Leasehold Improvements                                                                                   1,103                938
                                                                                                          -------            -------
   Totals - At Cost                                                                                         3,922              3,228
   Less: Accumulated Depreciation                                                                           1,659              1,113
                                                                                                          -------            -------
   Property and Equipment -Net                                                                              2,263              2,115
                                                                                                          -------            -------
Other Assets:
   Investments                                                                                                686              1,112
   Intangible Assets - [Net of Accumulated Amortization of $310 and
      $195, Respectively]                                                                                   1,444              1,019
   Deferred Tax Asset                                                                                         324                177
   Due from Related Parties                                                                                   135                136
   Other Assets                                                                                               260                231
                                                                                                          -------            -------
   Total Other Assets                                                                                       2,849              2,675
                                                                                                          -------            -------
   Total Assets                                                                                           $18,348            $16,735
                                                                                                          =======            =======
</TABLE>

The  Accompanying  Notes are an Integral  Part of these  Consolidated  Financial
Statements.

                                       F-3
<PAGE>

THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY


CONSOLIDATED BALANCE SHEETS
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]

<TABLE>
<CAPTION>

                                                                                         September 30,
                                                                                 1 9 9 9           1 9 9 8
<S>                                                                             <C>           <C>
Liabilities and Stockholders' Equity:
Current Liabilities:
   Accrued Payroll and Commissions                                              $  4,607      $       3,498
   Accounts Payable and Accrued Expenses                                           1,276                968
   Income Taxes Payable                                                            1,417                298
   Line of Credit                                                                    350              3,100
   Term Loan Payable                                                                 500                 --
   Deferred Revenue                                                                  380                131
   Other Current Liabilities                                                         576                156
                                                                                --------      -------------
   Total Current Liabilities                                                       9,106              8,151
                                                                                --------      -------------
Long-Term Liabilities:
   Term Loan Payable - Net of Current Portion                                        750                 --
   Deferred Credit                                                                   638                545
                                                                                --------      -------------
   Total Long-Term Liabilities                                                     1,388                545
                                                                                --------      -------------
Commitments and Contingencies                                                         --                 --
                                                                                --------      -------------
Stockholders' Equity:
   Preferred Stock - Par Value $.001 Per Share; Authorized
      2,000,000 Shares, None Issued or Outstanding                                    --                 --

   Common Stock - Par Value $.001 Per Share;
      Authorized 20,000,000 Shares, 5,163,948 and 5,162,282 Shares
      Issued and 4,153,948 and 5,121,282 Shares Outstanding
      at September 30, 1999 and 1998, Respectively                                     5                  5

   Additional Paid-in Capital                                                      7,428              7,426

   Accumulated Other Comprehensive Income                                             (7)                11

   Treasury Stock - At Cost; 1,010,000 and 41,000 Common Shares
      at September 30, 1999 and 1998, Respectively                                (2,248)               (80)

   Retained Earnings                                                               2,676                677
                                                                                --------      -------------
   Total Stockholders' Equity                                                      7,854              8,039
                                                                                --------      -------------
   Total Liabilities and Stockholders' Equity                                   $ 18,348      $      16,735
                                                                                ========      =============
</TABLE>

The  Accompanying  Notes are an Integral  Part of these  Consolidated  Financial
Statements.

                                       F-4
<PAGE>

THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY


CONSOLIDATED STATEMENTS OF OPERATIONS
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]

<TABLE>
<CAPTION>

                                                                                 Y e a r s   e n d e d
                                                                                S e p t e m b e r  30,
                                                                   1 9 9 9              1 9 9 8                1 9 9 7

<S>                                                            <C>                   <C>                   <C>
Revenue                                                        $    56,329           $    44,639           $    28,996
                                                               -----------           -----------           -----------
Operating Expenses:
   Selling Expenses                                                 44,139                35,015                22,413
   General and Administrative                                        7,771                 7,486                 4,555
   Depreciation and Amortization                                       660                   516                   337
                                                               -----------           -----------           -----------
   Total Operating Expenses                                         52,570                43,017                27,305
                                                               -----------           -----------           -----------
   Income from Operations                                            3,759                 1,622                 1,691
                                                               -----------           -----------           -----------
Other Income [Expenses]:
   Interest and Dividend Income                                        110                   128                   133
   Interest Expense                                                   (269)                 (219)                  (27)
   Realized Gain on Investments                                          3                     2                    37
                                                               -----------           -----------           -----------
   Total Other [Expenses] Income                                      (156)                  (89)                  143
                                                               -----------           -----------           -----------
   Income Before Income Tax Expense                                  3,603                 1,533                 1,834

Income Tax Expense                                                   1,604                   710                   552
                                                               -----------           -----------           -----------
   Net Income                                                  $     1,999           $       823           $     1,282
                                                               ===========           ===========           ===========
Basic Earnings Per Common Share                                $       .44           $       .16           $       .25
                                                               ===========           ===========           ===========

Diluted Earnings Per Common Share                              $       .41           $       .14           $       .23
                                                               ===========           ===========           ===========

Basic Weighted Average Shares                                    4,517,298             5,134,122             5,131,751
                                                               ===========           ===========           ===========

Diluted Weighted Average Shares                                  4,885,699             5,985,319             5,633,806
                                                               ===========           ===========           ===========
</TABLE>


The  Accompanying  Notes are an Integral  Part of these  Consolidated  Financial
Statements.

                                       F-5
<PAGE>
THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]
<TABLE>
<CAPTION>
                                                                                                                         Additional
                                                          Preferred Stock                 Common Stock                    Paid-in
                                                     Shares         Amount       Shares                   Amount          Capital
<S>                                                       <C>      <C>              <C>                <C>               <C>
Balance - October 1, 1996                                 --       $     --         5,139,285          $     5           $    8,488

   Treasury Shares
      Purchased                                           --             --                --               --                   --

   Net Income                                             --             --                --               --                   --
                                                      ------       --------         ---------          -------           -----------
Balance - September 30, 1997                              --             --         5,139,285                5                8,488

   Repurchase of 1,000,000
      Class A Warrants                                    --             --                --               --               (1,054)

   Costs Associated with
      Registering Class A
      Warrants                                            --             --                --               --                  (37)

   Exercise of Options                                    --             --            22,997               --                   29

   Treasury Shares Purchased                              --             --                --               --                   --

   Unrealized Gain on Available
      for Sale Securities - Net                           --             --                --               --                   --

   Net Income                                             --             --                                 --                   --
                                                      ------       --------         ---------          -------           -----------
Balance - September 30, 1998                              --             --         5,162,282                5                7,426

   Exercise of Options                                    --             --             1,666               --                    2

   Treasury Shares Purchased                              --             --                --               --                   --

   Unrealized [Loss] on Available
      for Sale Securities - Net                           --             --                --               --                   --

   Net Income                                             --             --                                 --                   --
                                                      ------       --------         ---------          -------           -----------
Balance - September 30, 1999                              --       $     --         5,163,948          $     5           $    7,428
                                                      ======       ========         =========          =======           ===========
</TABLE>
<TABLE>
<CAPTION>
                                             Accumulated
                                                 Other                                               Retained           Total
                                             Comprehensive            Treasury Stock                 Earnings        Stockholders'
                                                Income           Shares            Amount            [Deficit]          Equity
<S>                                           <C>                <C>      <C>                     <C>                <C>
Balance - October 1, 1996                     $     --               --   $      --               $  (1,428)         $   7,065

   Treasury Shares
      Purchased                                     --           10,000         (16)                     --                (16)

   Net Income                                       --               --          --                   1,282              1,282
                                              --------           ------   ---------               ---------         ----------
Balance - September 30, 1997                        --           10,000         (16)                   (146)             8,331

   Repurchase of 1,000,000
      Class A Warrants                              --               --          --                      --             (1,054)

   Costs Associated with
      Registering Class A
      Warrants                                      --               --          --                      --                (37)

   Exercise of Options                              --               --          --                      --                 29

   Treasury Shares Purchased                        --           31,000         (64)                     --                (64)

   Unrealized Gain on Available
      for Sale Securities - Net                     11               --          --                      --                 11

   Net Income                                       --               --          --                     823                823
                                              --------           ------   ---------               ---------         ----------
Balance - September 30, 1998                        11           41,000         (80)                    677              8,039

   Exercise of Options                              --               --          --                     --                   2

   Treasury Shares Purchased                        --          969,000      (2,168)                    --              (2,168)

   Unrealized [Loss] on Available
      for Sale Securities - Net                    (18)              --          --                     --                 (18)

   Net Income                                       --               --          --                  1,999               1,999
                                              --------        ---------   ---------               ---------         ----------
Balance - September 30, 1999                  $     (7)       1,010,000   $  (2,248)              $  2,676             $ 7,854
                                              ========        =========   =========               =========         ==========
</TABLE>
The  Accompanying  Notes are an Integral  Part of these  Consolidated  Financial
Statements.

                                       F-6
<PAGE>

THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY


CONSOLIDATED STATEMENTS OF CASH FLOWS
[AMOUNTS IN THOUSANDS]
<TABLE>
<CAPTION>


                                                                                                    Y e a r s   e n d e d
                                                                                                   S e p t e m b e r  30,
                                                                                           1 9 9 9          1 9 9 8          1 9 9 7
Operating Activities:
<S>                                                                                       <C>              <C>              <C>
   Net Income                                                                             $ 1,999          $   823          $ 1,282
                                                                                          -------          -------          -------
   Adjustments to Reconcile Net Income to
      Net Cash Provided by [Used for] Operating Activities:
      Depreciation and Amortization                                                           660              516              337
      Deferred Credit                                                                          93              161              118
      Provision for Losses on Accounts Receivable                                              80               75               35
      Net Realized Gain on Investments                                                         (3)              (2)             (37)
      Deferred Taxes                                                                         (297)             (79)             (84)

   Changes in Assets and Liabilities:
      [Increase] Decrease in:
         Accounts Receivable                                                               (1,335)          (2,858)          (3,253)
         Other Assets                                                                         (27)             (49)             (32)

      Increase [Decrease] in:
         Accounts Payable, Accrued Expenses,
            Accrued Payroll and Commissions                                                 1,417            1,004            1,492
         Income Tax Payable                                                                 1,119               31              290
         Deferred Revenue                                                                     249              155             --
         Other Current Liabilities                                                            448             (245)              36
                                                                                          -------          -------          -------
      Total Adjustments                                                                     2,404           (1,291)          (1,098)
                                                                                          -------          -------          -------
   Net Cash - Operating Activities                                                          4,403             (468)             184
                                                                                          -------          -------          -------
Investing Activities:
   Capital Expenditures                                                                      (693)          (1,089)            (791)
   Purchases of Investments                                                                  (602)            (800)          (2,845)
   Proceeds from Sales of Investments                                                         750            1,249            2,042
   Acquisitions of and Additions to Trade Names                                              (540)            (350)            (265)
   Cash Received from Related Parties                                                           1               55               10
   Increase in Cash Surrender Value of Officer
      Life Insurance                                                                           (8)             (46)             (23)
                                                                                          -------          -------          -------
   Net Cash - Investing Activities                                                         (1,092)            (981)          (1,872)
                                                                                          -------          -------          -------
Financing Activities:
   Borrowings Under Term Loan and Line of Credit                                            4,164            3,100             --
   Repayments Under Term Loan and Line of Credit                                           (5,664)            --               --
   Purchase of Treasury Stock and Warrants                                                 (2,168)          (1,118)             (16)
   Warrant Registration Costs                                                                --                (37)            --
   Proceeds from Exercise of Stock Options                                                      2               29             --
                                                                                          -------          -------          -------
   Net Cash - Financing Activities                                                         (3,666)           1,974              (16)
                                                                                          -------          -------          -------
   Net [Decrease] Increase in Cash and
      Cash Equivalents - Forward                                                          $  (355)         $   525          $(1,704)
</TABLE>

The  Accompanying  Notes are an Integral  Part of these  Consolidated  Financial
Statements.


                                       F-7
<PAGE>

THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY


CONSOLIDATED STATEMENTS OF CASH FLOWS
[AMOUNTS IN THOUSANDS

<TABLE>
<CAPTION>

                                                                                               Y e a r s   e n d e d
                                                                                               S e p t e m b e r  30,
                                                                                       1 9 9 9            1 9 9 8           1 9 9 7
<S>                                                                                    <C>                <C>               <C>
   Net [Decrease] Increase in Cash and
      Cash Equivalents - Forwarded                                                     $  (355)           $   525           $(1,704)

Cash and Cash Equivalents - Beginning of Years                                             935                410             2,114
                                                                                       -------            -------           -------
   Cash and Cash Equivalents - End of Years                                            $   580            $   935           $   410
                                                                                       =======            =======           =======
Supplemental Disclosures of Cash Flow Information:
   Cash paid during the years for:
      Interest                                                                         $   269            $   219           $    27
      Income Taxes                                                                     $   861            $   777           $   422

</TABLE>


The  Accompanying  Notes are an Integral  Part of these  Consolidated  Financial
Statements.


                                       F-8

<PAGE>

THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]



[1] Nature of Operations

The  Solomon-Page  Group Ltd. and its  wholly-owned  subsidiary  [the "Company"]
provides staffing services  comprised of two primary  operating  divisions:  (i)
temporary  staffing and  consulting,  which  provides  approximately  58% of the
Company's revenue and (ii) retained  executive search and full-time  contingency
search which provides  approximately 42% of the Company's  revenue.  The Company
provides its services  principally in the New York metropolitan area through its
offices located in New York and New Jersey.  The Company also provides  services
in California and Georgia through its offices located in those areas.

[2] Summary of Significant Accounting Policies

Principles of Consolidation - The consolidated  financial statements include the
accounts of the Company and its subsidiary.  All material  intercompany accounts
and transactions are eliminated.

Revenue  Recognition - Search  revenues are recognized in full-time  contingency
search  engagements  upon the  successful  completion  of the  assignment.  In a
retained executive search engagement,  the non-refundable retainer is recognized
according to the terms of the search contract, with the unearned portions of the
retainer  reflected  as  deferred  revenue.  The  balance  of  the  contract  is
recognized  upon  successful  completion of the search.  Temporary  staffing and
consulting  revenue is  recognized  when the  temporary  personnel  provide  the
service.

Receivable   Allowances  -  The  Company  records  allowances  against  accounts
receivable,  based on  historical  experience  to estimate  losses due to placed
candidates not fulfilling the terms of the search  agreement or not remaining in
employment for the Company's  guarantee period which generally ranges from 30 to
120 days but may  extend up to one year.  Losses  from bad debts are  charged to
expense and losses related to contract  fulfillment are charged to revenue.  The
Company  recognizes a loss on receivables when placed  candidates do not fulfill
the  terms of  search  agreement  or for not  remaining  in  employment  for the
guarantee period.

Investments - The Company  accounts for investments in accordance with Statement
of Financial  Accounting  Standards  ["SFAS"] No. 115,  "Accounting  for Certain
Investments  in  Debt  and  Equity   Securities."   Management   determines  the
appropriate  classification  of its investments in debt and equity securities at
the time of purchase and reevaluates  such  determination  at each balance sheet
date. Equity securities, and debt securities which the Company does not have the
intent to hold to maturity,  are  classified  as trading or available  for sale.
Securities  available  for sale are carried at fair value,  with any  unrealized
holding  gains and  losses,  net of tax,  reported  in a separate  component  of
stockholders'  equity until  realized.  Trading  securities  are carried at fair
value with any unrealized gains or losses included in earnings. Held to maturity
securities are carried at amortized cost.  Marketable debt and equity securities
available for current  operations,  and maturing within one year, are classified
in the balance sheet as current  assets while  securities  held for  non-current
uses, and maturing after one year, are classified as long-term assets.  Realized
gains and losses are  calculated  utilizing the specific  identification  method
[See Note 3].

Depreciation  -  Depreciation  of furniture,  fixtures and equipment is computed
utilizing the straight-line  method based on estimated useful lives ranging from
5 to 7 years.  Depreciation of leasehold  improvements is computed utilizing the
straight-line  method  over the  lesser  of the life of the  improvement  or the
remaining lease term. Depreciation expense was $545, $431 and $273 for the years
ended September 30, 1999, 1998 and 1997, respectively.


                                       F-9
<PAGE>

THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]



[2] Summary of Significant Accounting Policies [Continued]

Deferred  Income  Taxes - The Company  accounts  for  deferred  income  taxes in
accordance  with SFAS No. 109,  "Accounting  for Income  Taxes."  The  statement
requires that deferred income taxes reflect the tax consequences on future years
of  differences  between  the tax  bases of  assets  and  liabilities  and their
financial reporting amounts.

Deferred  Credit - The  Company's  lease on its  premises  provides for periodic
increases over the lease term. Pursuant to SFAS No. 13, "Accounting for Leases,"
the Company records rent expense on a straight-line  basis.  The effect of these
differences is recorded as a deferred credit.

Cash and Cash  Equivalents - Cash  equivalents  are comprised of certain  highly
liquid investments with a maturity of three months or less when purchased.

Earnings Per Common Share - Basic  earnings per share  represents  the amount of
earnings  for the period  available  to each share of common  stock  outstanding
during the reporting  period.  Diluted earnings per share reflects the amount of
earnings  for the period  available  to each share of common  stock  outstanding
during the  reporting  period,  while giving  effect to all  dilutive  potential
common  shares that were  outstanding  during the period,  such as common shares
that could result from the potential  exercise or conversion of securities  into
common stock.

The  computation  of diluted  earnings  per share  does not  assume  conversion,
exercise,  or contingent  issuance of securities that would have an antidilutive
effect on earnings per share.  The dilutive  effect of  outstanding  options and
warrants and their equivalents is reflected in diluted earnings per share by the
application  of the treasury  stock method which  recognizes the use of proceeds
that could be  obtained  upon  exercise of options  and  warrants  in  computing
diluted  earning  per  share.  It  assumes  that any  proceeds  would be used to
purchase common stock at the average market price during the period. Options and
warrants will have a dilutive  effect only when the average  market price of the
common  stock  during the period  exceeds  the  exercise  price of the option or
warrants.

Potential future dilutive securities include 2,050,000,  2,050,000 and 3,050,000
shares  issuable under  outstanding  warrants and 350,500,  225,500 and 0 shares
issuable  under  outstanding  options as of September  30, 1999,  1998 and 1997,
respectively.

Intangibles  - Intangibles  which consist of trade names and customer  lists are
recorded  at cost and are  amortized  utilizing  the  straight-line  method over
periods ranging from 4 to 15 years.  When changing  circumstances  warrant,  the
Company  evaluates the carrying value and the periods of  amortization  based on
the current and expected  future  non-discounted  cash flows from  operations to
determine  whether  revised  estimates  of  carrying  value or  useful  lives is
required.  Amortization  expense  was  $115,  $85 and $64  for the  years  ended
September 30, 1999, 1998 and 1997, respectively [See Note 9].

Accumulated Other Comprehensive  Income - Accumulated other comprehensive income
consists  entirely  of  unrealized  gains  and  losses  on  available  for  sale
securities.  The financial statement and footnote  disclosures  required by SFAS
130 have not been presented as they are not material.

                                      F-10
<PAGE>


THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]


[2] Summary of Significant Accounting Policies [Continued]

Concentrations of Credit Risk - Financial  instruments that potentially  subject
the Company to  concentrations of credit risk include cash, cash equivalents and
accounts  receivable  arising from its normal business  activities.  The Company
places  its  cash  and cash  equivalents  with  high  credit  quality  financial
institutions.   The  Company  had  approximately  $370  and  $561  in  financial
institutions  that is subject to normal  credit risk beyond  insured  amounts at
September 30, 1999 and 1998, respectively.

The Company believes that credit risk related to accounts  receivable is limited
due to the large  number of Fortune  1000  companies  comprising  the  Company's
customer base and the diversified  industries in which the Company operates. The
Company does not require  collateral on accounts  receivable or other  financial
instruments.

Use of Estimates - The  preparation of financial  statements in conformity  with
generally accepted  accounting  principles requires management to make estimates
and assumptions  that affect the reported  amounts of assets and liabilities and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

Advertising  -  The  Company  expenses  advertising  costs  as  incurred.  Total
advertising  costs charged to expense amounted to  approximately  $410, $430 and
$207 for the years ended September 30, 1999, 1998 and 1997, respectively.

Stock  Based  Compensation  - The  Company  accounts  for  employee  stock-based
compensation  under the intrinsic value based method as prescribed by Accounting
Principles  Board ["APB"]  Opinion No. 25. The Company applies the provisions of
SFAS No.  123,  "Accounting  for  Stock  Based  Compensation,"  to  non-employee
stock-based  compensation  and  the  pro  forma  disclosure  provisions  of that
statement to employee stock-based compensation.

Reclassifications  -  Certain  amounts  in prior  years  consolidated  financial
statements have been reclassified to conform with the current year presentation.

[3] Investments in Debt and Equity Securities

At September 30, 1999 and 1998,  the Company's  securities  consisted of certain
highly liquid debt  securities  which were  classified as available for sale and
held to maturity.  A summary of the Company's  investments in debt securities is
as follows:
<TABLE>
<CAPTION>

                                            September 30, 1999            September 30, 1998
Financial Statement Caption               Cost        Fair Value        Cost        Fair Value
---------------------------               ----        ----------        ----        ----------

Available for Sale:
<S>                                     <C>           <C>             <C>           <C>
   Investments                          $  1,550      $    1,535      $   1,695     $   1,715

Held to Maturity:
   Restricted Investment - Noncurrent   $     --      $       --      $      34     $      34
</TABLE>

Gross proceeds from sale of available for sale  securities was $750,  $1,249 and
$2,042  and  realized  gains on sales  was $3,  $2 and $37 for the  years  ended
September 30, 1999, 1998 and 1997, respectively.

                                      F-11
<PAGE>

THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]


[3] Investments in Debt and Equity Securities [Continued]

At September 30, 1999 and 1998, gross unrealized [losses] gains on available for
sale securities was $(15) and $20 and is included in stockholders' equity net of
taxes of $8 and $(9), respectively.

Contractual  maturities of debt securities  classified as available for sale and
held to maturity are as follows:
<TABLE>
<CAPTION>

                              September 30, 1999                 September 30, 1998
                    Available for Sale  Held to Maturity  Available for Sale  Held to Maturity
                    ------------------  ----------------  ------------------  ----------------

<S>                      <C>            <C>               <C>                 <C>
Within 1 year            $   850        $    --           $     600           $       36
Between 1 and 5 years    $   700        $    --           $   1,100           $       --
</TABLE>

[4] Due From Related Parties

At  September  30, 1999 and 1998,  the  Company  had a balance due from  various
officers of the Company  aggregating $135 and $136,  respectively.  The advances
bear interest at 8%.  Interest  income on the advances was $10, $13, and $12 for
the years ended September 30, 1999, 1998 and 1997, respectively. No interest was
receivable at September 30, 1999 and 1998.

[5] Line of Credit

In February 1999, the Company entered into a $6,500 credit  facility  agreement.
The facility agreement consists of a $5,000 working capital line of credit under
which up to $250 can be borrowed under standby letters of credit at a commitment
rate of 2%, and a term loan of $1,500.  The facility agreement is collateralized
by all of the Company's assets.  The agreement provides for borrowings under the
working  capital line of credit at 1% above the bank  reference rate and expires
on February 28, 2002. The bank's  reference rate at September 30, 1999 was 8.5%.
At September 30, 1999,  there was $350 of borrowings  under the working  capital
line of credit and $161 under standby letters of credit leaving $4,489 of credit
available.  The agreement  contains  various  covenants  among which are minimum
working  capital  and  tangible  net worth  requirements  and a  provision  that
restricts the payment of dividends in excess of 50% of net profits.

In February  1998,  the Company  entered  into a one year $4,000  demand line of
credit facility agreement, which was collateralized by all the Company's assets.
The agreement provided for borrowing at 1% above the bank's reference rate (8.5%
at September  30,  1998).  Borrowings  were limited to 80% of eligible  accounts
receivable and expired in February 1999, on which date the outstanding principal
amount was repaid. As of September 30, 1998, the full balance under the line was
available  and the  Company  borrowed  approximately  $3,100  under  the  credit
facility,  of which  approximately  $1,118  was used for the  repurchase  of the
Company's  common stock, and Class A redeemable  common stock purchase  warrants
with the balance used to fund current working capital requirements.

The weighted  average interest rate on short-term  borrowings  outstanding as of
September 30, 1999 and 1998 was 9.3% and 9.5%, respectively.


                                      F-12

<PAGE>

THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]

[6] Long-Term Debt

At September 30, 1999 and 1998, long-term debt consisted of the following:
<TABLE>
<CAPTION>

                                                                                                   1 9 9 9     1  9 9 8

<S>                                                                                                <C>         <C>
Note payable  under credit  facility  agreement  [See Note 5],  payable in equal
   quarterly principal  installments of $125 plus interest at 1.25% above bank's
   reference rate per annum through February 2002                                                  $1,250      $    --

Less:  Current Portion                                                                                500           --
                                                                                                   ------      -------
   Totals                                                                                          $  750      $    --
                                                                                                   ======      =======
</TABLE>

<TABLE>
<CAPTION>

Long-term debt at September 30, 1999 matures as follows:

<S>                                                                                                <C>
2000                                                                                               $  500
2001                                                                                                  500
2002                                                                                                  250
                                                                                                   ------
   Total                                                                                           $1,250
                                                                                                   ======
</TABLE>

[7] Leases

Operating  Leases - The  Company  leases  office  space under  operating  leases
expiring  through  September  2006.

Minimum  future rental  payments  under  noncancelable  operating  leases having
remaining  terms in excess of one year as of September  30, 1999 for each of the
next five years and in the aggregate are:

Year ending
September 30,
   2000                                                  $  1,111
   2001                                                     1,137
   2002                                                     1,151
   2003                                                     1,057
   2004                                                       993
   Subsequent to 2004                                       1,776
                                                         --------
   Total Minimum Future Rental Payments                  $  7,225
                                                         ========

In addition,  the Company is liable for its pro-rata  share of increases in real
estate taxes and escalations as provided in the lease agreements.

Rent  expense  was  approximately  $1,231,  $1,017 and $617 for the years  ended
September 30, 1999, 1998 and 1997, respectively.

                                      F-13
<PAGE>

THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]


[8] Capital Stock

On  September  11,  1998,  the  Company's  Board  of  Directors  authorized  the
repurchase of 1,000,000 shares of the Company's common stock, from time to time,
in the open  market or in  privately  negotiated  transactions.  During the year
ended September 30, 1999,  969,000 shares were  repurchased at a cost of $2,168.
During the year ended  September 30, 1998,  31,000 shares were  repurchased at a
cost of $64.

On December 18, 1996, the Company's Board of Directors authorized the repurchase
of up to 500,000 shares of the Company's common stock, from time to time, in the
open market or in privately  negotiated  transactions.  The Company  repurchased
10,000  shares  during the year ended  September  30, 1997, at a cost of $16. On
October 31, 1997, the Company's  Board of Directors  terminated the December 18,
1996 common stock repurchase plan.

[9] Commitments and Contingencies

Litigation - The Company is party to  litigation  arising from the normal course
of business. In managements' opinion, this litigation will not materially affect
the Company's financial position, results of operations or cash flows.

Intangibles  - In  connection  with  certain  acquisitions,  the Company will be
required to pay purchase price  adjustments  through September 2004 based on the
achievement  of various  criteria.  These  additional  payments  are  charged to
intangibles  and are amortized over the then  remaining life of the  intangible.
Purchase price  adjustments  amounted to approximately  $190 and $350 during the
years ended  September 30, 1999 and 1998,  respectively.  During the fiscal year
ending  September 30, 1999,  the Company  acquired two trade names for $350. The
acquisitions also include potential purchase price adjustments.

[10] Options and Warrants

On April 1, 1994,  the Company issued 175,000 Class A warrants and 175,000 Class
B warrants in  connection  with  certain  bridge  financing  which was repaid on
October 20,  1994.  The Class A warrants  are  identical  to those issued in the
Company's  initial  public  offering.  The Class B warrants are identical to the
Class A warrants except that the exercise price is $6.00 per share.

On October 20, 1994, in connection  with its initial public offering the Company
issued 2,300,000 Class A redeemable common stock purchase warrants. Each Class A
warrant  entitles  the holder to purchase one share of common stock at $4.50 per
share commencing October 20, 1995 and expired on October 20, 1999.
The Class A warrants are redeemable at $.05 per warrant based on the achievement
of certain criteria.

On October 20, 1994, in connection with its initial public offering, the Company
granted to its  underwriter  an option to purchase an aggregate of 200,000 units
of Company  securities  [consisting of one share of common stock and one Class A
redeemable  common  stock  purchase  warrant]  exercisable  at  $6.60  per  unit
commencing October 20, 1995 and expired on October 20, 1999.

On October 31, 1997, the Company's Board of Directors  authorized the repurchase
of up to 1,000,000 of the  Company's  Class A redeemable  common stock  purchase
warrants in open market or privately  negotiated  transactions.  On February 12,
1998,  the Company  completed  the  repurchase  of 1,000,000  Class A redeemable
common stock purchase warrants at a cost of $1,054.


                                      F-14

<PAGE>
THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]


[10] Options and Warrants [Continued]

On August 17, 1995, the Company  adopted the 1995  Director's  Stock Option Plan
[the "Director's  Plan"].  The Director's Plan provides for the grant of options
to  purchase  up to  100,000  shares of common  stock to  Directors  who are not
employees of the Company.  Options  granted  under the  Director's  Plan will be
exercisable commencing a minimum of 6 months from the date of grant for a period
of 10 years from the date of grant at an  exercise  price which is not less than
the fair market value of the common stock on the date of the grant. Options vest
at a rate of 50% after one year and 50% after two years.

On August 6, 1993,  the Company  adopted the 1993 Long Term  Incentive Plan [the
"1993 Plan"], which was amended on June 24, 1994. The 1993 Plan provides for the
issuance of  incentive  awards in the form of but not limited to stock  options,
stock appreciation  rights,  restricted stock and performance grants to purchase
up to  1,500,000  shares  of  common  stock and  provides  that all  individuals
performing  services for the Company are eligible to receive  incentive  awards.
The  1993  Plan is  administered  by a  committee  designated  by the  Board  of
Directors. The selection of participants,  allotment of shares, determination of
price and other  conditions of purchase of any awards granted will be determined
by such  committee  at its sole  discretion.  The purpose of the 1993 Plan is to
attract and retain persons instrumental to the success of the Company. Incentive
stock options granted under the 1993 Plan will be exercisable for a period of up
to 10 years from the date of grant at an  exercise  price which is not less than
the fair market value of the common stock on the date of the grant,  except that
the  term  of an  incentive  stock  option  granted  under  the  1993  Plan to a
stockholder  owning more than 10% of the outstanding  shares of the common stock
may not exceed  five years and its  exercise  price may not be less than 110% of
the  fair  market  value  of  the  common  stock  on  the  date  of  the  grant.
Non-executive  officer  options vest at a rate of 33 1/3% after three years,  33
1/3% after four years and 33 1/3% after five years.  Options to purchase 450,000
shares of common  stock have been  granted to  executive  officers and vest at a
rate of 33 1/3% upon grant,  33 1/3% after six months and 33 1/3% after thirteen
months.

On September 17, 1996, the Company adopted the 1996 Stock Option Plan [the "1996
Plan"].  The 1996 Plan  provides  for  awards of  incentive  stock  options  and
non-qualified  options to purchase  up to  1,000,000  shares of common  stock to
employees   and   directors  of  the  Company.   The  1996  Plan  provides  that
non-qualified  options must be granted at not less than 80% of fair market value
on the date  granted.  No  options  at less than  fair  market  value  have been
awarded.  Non-executive  officer  options  vest at a rate of 33 1/3% after three
years, 33 1/3% after four years and 33 1/3% after five years. Executive officers
vest at a rate of 33 1/3%  after one year,  33 1/3%  after two years and 33 1/3%
after three years.

A summary of the activity in the option plans is as follows:
<TABLE>
<CAPTION>

                                                                                      Weighted Average
                                                                     Shares            Exercise Price

<S>                                                                <C>                    <C>
Outstanding at October 1, 1996                                     1,773,500              $  1.71
   Granted                                                           246,750                 2.33
   Exercised                                                             --
   Expired/Canceled                                                  (55,000)                1.43
                                                                   ---------
   Outstanding at September 30, 1997                               1,965,250                 1.80
   Granted                                                           355,500                 2.70
   Exercised                                                         (22,997)                1.27
   Expired/Canceled                                                 (128,169)                1.85
                                                                   ---------
   Outstanding at September 30, 1998                               2,169,584                 1.95
   Granted                                                           190,000                 2.13
   Exercised                                                          (1,666)                1.25
   Expired/Canceled                                                  (94,000)                2.35
                                                                   ---------
   Outstanding at September 30, 1999                               2,263,918                 1.95
                                                                   =========
   Exercisable at September 30, 1999                               1,429,888              $  1.80
                                                                   =========
</TABLE>


                                      F-15
<PAGE>

THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]


[10] Options and Warrants [Continued]

No  compensation  cost was charged to earnings  during the years ended September
30, 1999,  1998 and 1997.  If  compensation  cost for the stock option plans had
been determined  based on the fair value at the grant dates for awards under the
plans,  consistent with the alternative method set forth under SFAS No. 123, the
Company's  net  income,  basic and  diluted  earnings  per share would have been
reduced on a pro forma basis as indicated below:
<TABLE>
<CAPTION>

                                                           1 9 9 9      1 9 9 8             1 9 9 7
Year ended September 30:
Net Income:
<S>                                                      <C>           <C>                <C>
   As Reported                                           $  1,999      $    823           $      1,282
   Pro Forma                                             $  1,888      $    500           $        953

Basic Earnings Per Common Share:
   As Reported                                           $    .44      $    .16           $        .25
   Pro Forma                                             $    .42      $    .10           $        .19

Diluted Earnings Per Common Share:
   As Reported                                           $    .41      $    .14           $        .23
   Pro Forma                                             $    .40      $    .09           $        .17

</TABLE>

The fair value of each option  grant is estimated on the date of grant using the
Black-Scholes   option-pricing   model  with  the   following   weighted-average
assumptions used for the grants awarded in 1999 and 1998, respectively:

                                               S e p t e m b e r  30,
                                       1 9 9 9         1 9 9 8       1 9 9 7

Dividend Yields                          0.00%           0.00%        0.00%
Expected Volatility                     88.86%         131.54%      105.29%
Risk-Free Interest Rate                  5.41%           4.32%        5.99%
Expected Lives                          4 Years        5.5 Years    4 Years

The  weighted-average  fair value of options granted was $1.42,  $2.40 and $1.73
for the years ended September 30, 1999, 1998 and 1997, respectively.

The following table summarizes  information about stock options at September 30,
1999:
<TABLE>
<CAPTION>

                                 Outstanding                                      Exercisable
                                   Weighted          Weighted                     Weighted
  Range of                         Remaining         Average                      Average
Exercise Prices       Shares     Contractual Life  Exercise Price    Shares     Exercise Price
---------------       ------     ----------------  --------------    ------     --------------

<S>     <C>         <C>              <C>          <C>              <C>            <C>
$0.56 - $2.00       1,157,918        4.2 Years    $    1.47        717,988        $   1.35
$2.01 - $3.69       1,106,000        6.3 Years    $    2.45        712,000        $   2.25
                    ---------                                    ---------
                    2,263,918        4.9 Years    $    1.95      1,429,988        $   1.80
                    =========                                    =========
</TABLE>


                                      F-16
<PAGE>
THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]


[11] Income Taxes Expense

The provision for income tax expense consists of the following:
<TABLE>
<CAPTION>

                                                                                                 S e p t e m b e r  30,
                                                                                      1 9 9 9            1 9 9 8             1 9 9 7
                                                                                      -------            -------             -------
Current:
<S>                                                                                   <C>                <C>                <C>
   Federal                                                                            $ 1,283            $   524            $   836
   Utilization of Net Operating Loss Carryforward                                          (5)               (13)              (423)
   State and City                                                                         623                278                453
   Utilization of Net Operating Loss Carryforward                                        --                 --                 (230)
                                                                                      -------            -------            -------
   Total Current                                                                        1,901                789                636
                                                                                      -------            -------            -------
Deferred [Benefit]:
   Federal                                                                               (200)               (50)               (61)
   State and City                                                                         (97)               (29)               (23)
                                                                                      -------            -------            -------
   Total Deferred                                                                        (297)               (79)               (84)
                                                                                      -------            -------            -------
   Total Income Tax Expense                                                           $ 1,604            $   710            $   552
                                                                                      =======            =======            =======
</TABLE>

Income tax at the federal  statutory rate reconciled to the Company's  effective
rate is as follows:
<TABLE>
<CAPTION>

                                                                                      S e p t e m b e r  30,
                                                                          1 9 9 9          1 9 9 8          1 9 9 7
                                                                          -------          -------          -------

<S>                                                                         <C>              <C>              <C>
Federal Statutory Rate                                                      34.0%            34.0%            34.0%
Non Deductible Expenses                                                      2.2              1.9              4.4
Benefit of Net Operating Loss Carryforward                                   (.1)             (.9)           (23.1)
Change in Deferred Tax Asset Valuation Allowance                              --               --              7.8
State and City Income Taxes [Net of Federal Tax Benefit]                    11.5             12.0              8.1
Other                                                                       (3.1)             (.7)            (1.1)
                                                                           -----             ----             ----
   Effective Rate                                                           44.5%            46.3%            30.1%
                                                                           =====             ====             ====
</TABLE>

The major  components  of  deferred  income tax assets  and  liabilities  are as
follows:
                                                 September 30,
                                           1 9 9 9           1 9 9 8
Deferred Tax Liabilities:
   Cash Basis Adjustments                $      --          $    (89)
   Accelerated Depreciation                    (65)              (90)
   Other                                        --                (9)
                                         ---------          --------
   Total Deferred Tax Liabilities              (65)             (188)
                                         ---------          --------
Deferred Tax Assets:
   Rent Deferrals                              276               240
   Net Operating Loss                           --                 5
   Reserves                                    121                79
   Other                                        47                --
   Deferred Revenue                             72                27
                                         ---------          --------
   Total Deferred Tax Assets                   516               351
                                         ---------          --------
Net Deferred Tax Asset                   $     451          $    163
                                         =========          ========

                                      F-17
<PAGE>
THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]


[11] Income Taxes Expense [Continued]

The provision for income tax expense consists of the following:

                                                    September 30,
                                                 1 9 9 9      1 9 9 8
                                                 -------      -------

Net Current Deferred Tax Asset [Liability]      $    127    $    (14)
Net Noncurrent Deferred Tax Asset                    324         177
                                                --------    --------
   Net Deferred Tax Asset                       $    451    $    163
                                                ========    ========

As of  September  30,  1999,  the net current  deferred tax asset is included in
other current assets in the accompanying balance sheet.

As of September 30, 1998, the net current  deferred tax liability is included in
other current liabilities in the accompanying balance sheet.

[12] Earnings Per Share

The  following  is a  reconciliation  of basic  earnings  per  share to  diluted
earnings per share for the years ended September 30, 1999, 1998 and 1997:
<TABLE>
<CAPTION>

                                                               S e p t e m b e r  30,
                                                    1 9 9 9           1 9 9 8         1 9 9 7
                                                    -------           -------         -------

<S>                                               <C>               <C>             <C>
Basic Earnings Per Common Share                   $        .44      $      .16      $       .25
                                                   ===========       =========       ==========

Weighted Average Shares Outstanding - Basic          4,517,298       5,134,122        5,131,751
Dilutive Options                                       368,401         851,197          502,055
                                                   -----------       ---------       ----------

Weighted Average Shares Outstanding - Diluted        4,885,699       5,985,319        5,633,806
                                                   ===========       =========       ==========

   Diluted Earnings Per Common Share              $        .41      $      .14      $       .23
                                                   ===========       =========       ==========
</TABLE>

[13] Retirement Plan

The Company  maintains a 401[k]  savings  plan which  covers  substantially  all
employees.  Under  the  plan,  employees  may  elect to defer up to 15% of their
salary,  subject to the Internal  Revenue  Code  limits.  The Company may make a
discretionary  match as well as a discretionary  contribution.  No discretionary
match or contribution was made, and no amount was charged to operations,  during
the years ended September 30, 1999, 1998 or 1997.

[14] Segment Information

Significant  Customers - For the year ended  September  30,  1999,  one customer
accounted for 10% of revenues  from  continuing  operations.  For the year ended
September  30,  1998,  another  customer  accounted  for  14% of  revenues  from
continuing operations.  For the year ended September 30 1997, two customers each
accounted for 11% of revenues from continuing operations.

Geographic  Information - For the years ended September 31, 1999, 1998 and 1997,
the Company derived substantially all of its revenues from businesses located in
the  United  States,  and no other  country  accounted  for more than 10% of the
Company's revenues.

                                      F-18
<PAGE>

THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]


[14] Segment Information [Continued]

Business Segments - The Company is provider of staffing services  organized into
two primary operating divisions: temporary staffing and consulting and executive
search  and  full-time  contingency  recruitment.  The  temporary  staffing  and
consulting  division  provides  services to companies  seeking  personnel in the
information  technology,  accounting,  human  resources  and  legal  areas.  The
executive search and full-time  contingency  recruitment  division comprises ten
lines of business,  including five industry [capital markets, publishing and new
media,  healthcare  and  fashion  services  and  banking],  and five  functional
[information technology,  accounting,  human resources, legal and administrative
support].

The Company evaluates  performance based on the segments' profit from operations
before unallocated corporate overhead. The accounting policies of the reportable
segments  are  the  same  as  those  described  in the  summary  of  significant
accounting policies [see Note 2].
<TABLE>
<CAPTION>

                                                  Temporary      Executive
                                                  Staffing and   Search and
                                                  Consulting     Full-Time         Corporate                     Total
                                                  ----------     ---------         ---------                     -----

Year ended September 30, 1999:
<S>                                             <C>            <C>               <C>              <C>
   Revenues                                     $     32,894   $     23,435      $      --        $     56,329
   Income from Operations                       $      2,424   $      2,328      $    (993)       $      3,759
   Capital Expenditures                         $        235   $        354      $     104        $        693
   Total Assets                                 $      6,401   $      7,508      $   4,439        $     18,348
   Depreciation and Amortization                $        253   $        210      $     197        $        660

Year ended September 30, 1998:
   Revenues                                     $     26,865   $     17,774      $      --        $     44,639
   Income from Operations                       $      1,206   $      1,159      $    (743)       $      1,622
   Capital Expenditures                         $        185   $        740      $     164        $      1,089
   Total Assets                                 $      6,268   $      6,643      $   3,824        $     16,735
   Depreciation and Amortization                $        209   $        162      $     145        $        516

Year ended September 30, 1997:
   Revenues                                     $     14,479   $     14,517      $      --        $     28,996
   Income from Operations                       $      1,129   $      1,085      $    (523)       $      1,691
   Capital Expenditures                         $        201   $        471      $     119        $        791
   Segment Assets                               $      5,064   $      3,980      $   3,771        $     12,815
   Depreciation and Amortization                $        122   $        113      $     102        $        337

Reconciliation to Net Income:
</TABLE>

                                                       Ye a r s  e n d e d
                                                     S e p t e m b e r  30,
                                               1 9 9 9    1 9 9 8      1 9 9 7

Segment Income from Operations             $    3,759   $   1,622    $   1,691
Unallocated Amounts:
   Interest and Dividend Income                   110         128          133
   Interest Expense                              (269)       (219)         (27)
   Realized Gain on Investments                     3           2           37
                                           ----------   ---------    ---------
   Income Before Income Tax Expense        $    3,603   $   1,533    $   1,834
                                           ==========   =========    =========

                                      F-19
<PAGE>

THE SOLOMON-PAGE GROUP LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS]


[15] Fair Value of Financial Instruments

Effective  October 1, 1995, the Company adopted SFAS No. 107,  "Disclosure about
Fair Value of Financial  Instruments,"  which requires  disclosing fair value to
the  extent  practicable  for  financial  instruments  which are  recognized  or
unrecognized in the balance sheet.  The fair value of the financial  instruments
disclosed herein is not necessarily  representative  of the amount that could be
realized  or  settled,   nor  does  the  fair  value  amount  consider  the  tax
consequences  of  realization or settlement.  Carrying value  approximates  fair
value for amounts  classified  as due from  related  parties as the  receivables
carry market rates of interest. For certain instruments, including cash and cash
equivalents,  trade  receivables  and trade payables and line of credit,  it was
estimated that the carrying amount  approximates  fair value for the majority of
these instruments because of their short maturities.

[16] Quarterly Information [Unaudited]
<TABLE>
<CAPTION>

                                                   Q u a r t e r  E n d e d
                                     December 31,    March 31,   June 30,     September 30,
Fiscal 1999:
<S>                                  <C>            <C>         <C>            <C>
   Revenues                          $   11,516     $ 12,779    $  16,151      $  15,928
   Income from Operations                   342          733        1,768            926
   Net Income                               165          372          929            533
   Net Income per Share - Basic             .03          .08          .21            .12
   Net Income per Share - Diluted           .03          .08          .20            .11
</TABLE>

[17] New Authoritative Accounting Pronouncements

The  Financial   Accounting  Standards  Board  ["FASB"]  issued  SFAS  No.  137,
"Accounting  for  Derivative  Instruments  and  Hedging  Activities-Deferral  of
Effective Date of FASB  Statements  No. 133." The Statement  defers for one year
the  effective  date of FASB  Statement  No.  133,  "Accounting  for  Derivative
Instruments  and  Hedging  Activities".  The rule now will  apply to all  fiscal
quarters of all fiscal years  beginning  after June 15, 2000. In June 1998,  the
FASB issued SFAS No. 133,  "Accounting  for Derivative  Instruments  and Hedging
Activities,"  which is required to be adopted in years  beginning after June 15,
1999.  The Statement  permits  early  adoption as of the beginning of any fiscal
quarter after its issuance.  The Statement will require the Company to recognize
all  derivatives  on the balance sheet at fair value.  Derivatives  that are not
hedges must be adjusted to fair value  through  income.  If the  derivative is a
hedge,  depending  on the  nature of the  hedge,  changes  in the fair  value of
derivatives will either be offset against the change in fair value of the hedged
assets, liabilities, or firm commitments through earnings or recognized in other
comprehensive  income  until the hedged  item is  recognized  in  earnings.  The
ineffective  portion of a derivative's  change in fair value will be immediately
recognized in earnings.  The Company has not yet  determined  what the effect of
SFAS No. 133 will be on the earnings and financial position of the Company.

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin  ("SAB") No. 101,  Revenue  Recognition in Financial  Statements  ("SAB
101").  SAB 101  summarizes  certain of the staff's views in applying  generally
accepted accounting  principles to revenue recognition in financial  statements.
The Company is in the process of evaluating this SAB and the effect it will have
on our future consolidated  financial  statements and future revenue recognition
policy.

                                      F-20
<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.

                           THE SOLOMON-PAGE GROUP LTD.


Dated August 21, 2000                          By /s/ Lloyd Solomon
                                                  ------------------------------
                                                  Lloyd Solomon
                                                  Vice Chairman
                                                  Chief Executive Officer

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities and on the dates indicated:


          Signature                      Title                        Date


/s/ Herbert Solomon              Chairman of the Board          August 21, 2000
-----------------------------    and Director
Herbert Solomon


/s/ Lloyd Solomon                Vice Chairman of the Board,    August 21, 2000
-----------------------------    Chief Executive Officer
Lloyd Solomon                    and Director (Principal
                                 Executive Officer)


/s/ Scott Page                   President and Director         August 21, 2000
-----------------------------
Scott Page


/s/ Eric M. Davis                Vice President - Finance,      August 21, 2000
-----------------------------    Chief Financial Officer and
Eric M. Davis                    Director (Principal Financial
                                 and Accounting Officer)

*                                Director                       August 21, 2000
-----------------------------
Edward Ehrenberg


*                                Director                       August 21, 2000
-----------------------------
Joel A. Klarreich


              /s/ Eric M. Davis
              ----------------------
              * By:  Eric M. Davis
               Attorney-in-Fact