SECURITIES & EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q
                                    ---------

(Mark One)

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
         EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999

                                       or

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(D) OF THE SECURITIES
         EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM            TO

COMMISSION FILE NO.     1-15097

                          LYNCH INTERACTIVE CORPORATION
                          -----------------------------
             (Exact name of Registrant as specified in its charter)

            DELAWARE                                          06-145056
            --------                                          ---------
(State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                            Identification No.)

401 THEODORE FREMD AVENUE, RYE, NEW YORK                              10580
----------------------------------------                              -----
(Address of principal executive offices)                            (Zip Code)

                                 (914) 921-8821
               Registrant's telephone number, including area code

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

YES      NO  X

Indicate the number of shares outstanding of each of the Registrant's classes of
Common Stock, as of the latest practical date.

            CLASS                             OUTSTANDING AT OCTOBER 31, 1999
            -----                          -------------------------------------
Common Stock, $.0001 par value                          1,412,383



<PAGE>



                                      INDEX

                 LYNCH INTERACTIVE CORPORATION AND SUBSIDIARIES

PART I.     FINANCIAL INFORMATION

Item 1.  Financial Statements (Unaudited)

         Condensed Consolidated Balance Sheet:
         -      September 30, 1999
         -      December 31, 1998

        Condensed Consolidated Statements of Operations:
         -      Three and nine months ended September 30, 1999 and 1998

        Condensed Consolidated Statements of Cash Flows:
        -      Nine months ended September 30, 1999 and 1998

        Notes to Condensed Consolidated Financial Statements:


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


Item 3.  Quantitative and Qualitative Disclosure About Market Risk

PART II.    OTHER INFORMATION

Item 5.  Other

Item 6.  Exhibits and Reports on Form 8-K


<PAGE>



SIGNATURES


<PAGE>


Part 1 - FINANCIAL INFORMATION -
Item 1 - Financial Statements

<TABLE>
                 LYNCH INTERACTIVE CORPORATION AND SUBSIDIARIES
                 ----------------------------------------------
                      CONDENSED CONSOLIDATED BALANCE SHEET
                 ----------------------------------------------
                                 (In thousands)

<CAPTION>
                                                           September  30   December 31
                                                               1999          1998
                                                            (Unaudited)      (A)
                                                            ---------      ---------
ASSETS
CURRENT ASSETS:
<S>                                                            <C>          <C>
   Cash and Cash Equivalents .............................     $21,123      $27,988
   Receivables,less Allowances of $330 and $320...........      19,647       18,853
   Deferred income tax benefits ..........................       4,300        4,265

   Other current assets ..................................       7,599        6,941
                                                             ---------    ---------
    TOTAL CURRENT ASSETS .................................      52,669       58,047

PROPERTY,PLANT AND EQUIPMENT:
   Land ..................................................       1,247        1,247
   Buildings and Improvements ............................       9,774        9,591
   Machinery and Equipment ...............................     139,565      129,251
                                                             ---------    ---------
                                                               150,586      140,089
   Accumulated Depreciation ..............................     (55,763)     (48,906)
                                                             ---------    ---------
                                                                94,823       91,183
EXCESS OF COST OVER FAIR VALUE OF NET ASSETS ACQUIRED,NET       64,816       47,740
OTHER ASSETS .............................................      33,298       49,122
                                                             ---------    ---------
    TOTAL  ASSETS ........................................   $ 245,606    $ 246,092
                                                             =========    =========
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
   Notes payable to banks ................................     $16,105       $2,037
   Notes payable to Lynch ................................           0       15,150
   Trade accounts payable ................................       4,957        4,662
   Accrued interest payable ..............................         759          889
   Accrued liabilities ...................................      18,090       19,017
   Customer advances .....................................       2,130        1,996
   Current maturities of long - term debt ................      11,592        8,639
                                                             ---------    ---------
    TOTAL CURRENT  LIABILITIES ...........................      53,633       52,390

LONG-TERM DEBT ...........................................     130,622      119,024
DEFERRED INCOME TAXES ....................................      14,391       19,850
OTHER LONG TERM LIABILITIES ..............................       5,958        4,987
MINORITY INTERESTS .......................................       9,976       10,527

SHAREHOLDERS' EQUITY
   COMMON STOCK,NO PAR VALUE-10,000,000 SHARES
   AUTHORIZED; 1,412,383 shares issued (at stated value)             0            0
   ADDITIONAL PAID - IN CAPITAL ..........................      23,004       29,073
   RETAINED EARNINGS .....................................          56            0

   ACCUMULATED OTHER COMPREHENSIVE INCOME ................       7,966       10,241
                                                             ---------    ---------
    TOTAL SHAREHOLDERS' EQUITY ...........................      31,026       39,314
                                                             ---------    ---------
    TOTAL  LIABILITIES AND SHAREHOLDERS' EQUITY               $245,606    $ 246,092
                                                             =========    =========
</TABLE>
See accompanying notes


<PAGE>
<TABLE>
                 LYNCH INTERACTIVE CORPORATION AND SUBSIDIARIES
                 ----------------------------------------------
                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                 -----------------------------------------------
                                   (UNAUDITED)
                      (In thousands, except share amounts)

<CAPTION>
                                                                         Three Months                   Nine  Months
                                                                      Ended September 30            Ended September 30
                                                                       1999          1998            1999          1998
                                                                      -------       -------         ------        ------

SALES AND REVENUES ............................................
<S>                                                               <C>            <C>            <C>            <C>
  Multimedia ..................................................   $    15,513    $    14,196    $    42,855    $    40,520
  Services ....................................................        37,312         39,135        112,907        114,629
                                                                  -----------    -----------    -----------    -----------
                                                                  $    52,825    $    53,331    $   155,762    $   155,149

Costs and expenses:

    Multimedia ................................................        10,610          9,958         29,779         28,410
    Services ..................................................        34,627         35,856        104,123        105,217
    Selling and administrative ................................         3,019          2,748          9,467          9,069
                                                                  -----------    -----------    -----------    -----------
OPERATING PROFIT ..............................................         4,569          4,769         12,393         12,453

Other income (expense):

    Investment Income .........................................           682            757          1,716          2,357
    Interest expense ..........................................        (2,874)        (2,545)        (8,121)        (7,984)
    Share of operations of affiliated companies ...............            44             44            147            169
    Reserve for impairment of investment in PCS license holders             0              0        (15,406)             0
    Gain on sales of subsidiary stock .........................             0              0              0             13
                                                                  -----------    -----------    -----------    -----------
                                                                       (2,148)        (1,744)       (21,664)        (5,445)
                                                                  -----------    -----------    -----------    -----------

INCOME (LOSS) BEFORE INCOME TAXES

MINORITY INTERESTS AND  EXTRAORDINARY ITEM ....................         2,421          3,025         (9,271)         7,008

Benefit  for income taxes .....................................        (1,166)        (1,274)         2,600         (2,930)
Minority interests ............................................          (185)          (315)          (616)          (688)
                                                                  -----------    -----------    -----------    -----------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM .......................   $     1,070    $     1,436    ($    7,287)   $     3,390
                                                                  -----------    -----------    -----------    -----------
LOSS FROM EARLY EXTINGUISHMENT OF

DEBT,NET OF TAX BENEFIT OF $105 ...............................             0              0           (160)
                                                                  -----------    -----------    -----------    -----------
NET INCOME (LOSS) .............................................   $     1,070    $     1,436    ($    7,447)   $     3,390
                                                                  ===========    ===========    ===========    ===========


   Weighted average shares outstanding ........................     1,412,000      1,418,000      1,415,000      1,418,000
                                                                  ===========    ===========    ===========    ===========
BASIC EARNINGS PER SHARE


INCOME(LOSS BEFORE EXRAORDINARY ITEM ..........................   $      0.76    $      1.01    ($     5.15)   $      2.39
EXTRAORDINARY ITEM ............................................          0.00           0.00          (0.11)          0.00
                                                                  -----------    -----------    -----------    -----------
                                                                  $      0.76    $      1.01    ($     5.26)   $      2.39
NET INCOME (LOSS) .............................................   ===========    ===========    ===========    ===========
</TABLE>

<PAGE>

<TABLE>


                 LYNCH INTERACTIVE CORPORATION AND SUBSIDIARIES
                   -------------------------------------------
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                   -------------------------------------------
                                   (UNAUDITED)
                                 (In thousands)

                                                                                        Nine Months Ended
                                                                                          September 30
                                                                                      1999             1998
                                                                                    --------          -------
OPERATING ACTIVITIES
<S>                                                                                <C>                <C>
Net income (loss) ..............................................................   ($ 7,447)          $  3,390

Adjustments to reconcile net income (loss) to net cash
provided by operating activities:

   Depreciation and amortization ...............................................     11,231             10,571
   Net effect of purchases of sales of trading securities ......................       (621)              (260)
   Deferred taxes ..............................................................     (5,238)               306
   Share of operations of affiliated companies .................................       (147)              (169)
   Minority interests ..........................................................        616                688
   Reserve for impairment of investment in PCS license holders..................     15,406                 --
   Changes in operating assets and liabilities:
     Receivables ...............................................................       (324)            (3,085)
     Accounts payable and accrued liabilities ..................................       (914)             4,721
     Other .....................................................................        578              2,170
                                                                                   --------           --------
NET CASH FROM (USED IN) OPERATING ACTIVITIES ...................................     13,140             18,332
                                                                                   --------           --------

INVESTING  ACTIVITIES
Capital Expenditures ...........................................................     (8,171)            (7,135)
Investment in PCS partnerships .................................................     15,406              2,003
Acquitsition of Central Scott Telephone Company ................................    (25,414)                 0
Other ..........................................................................     (1,507)            (2,183)
                                                                                   --------           --------
NET CASH USED IN INVESTING ACTIVITIES ..........................................    (35,092)            (9,318)
                                                                                   --------           --------
FINANCING ACTIVITIES

Issuance of long - term debt ...................................................     30,103            (19,147)
Advances from/to Lynch Corporation .............................................    (15,987)             2,852

Other ..........................................................................        971               (647)

                                                                                   --------           --------
NET CASH FROM (USED IN) FINANCING ACTIVITIES ...................................     15,087            (16,942)
                                                                                   --------           --------
Net decrease  in cash and cash equivalents .....................................     (6,865)            (7,928)
Cash and cash equivalents at beginning of period ...............................     27,988             27,058
                                                                                   --------           --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD .....................................     21,123             19,130
                                                                                   ========           ========

</TABLE>

<PAGE>





A.     SUBSIDIARIES OF THE REGISTRANT

As of September 30, 1999, the Subsidiaries of the Registrant are as follows:
<TABLE>
<CAPTION>

SUBSIDIARY                                                                OWNED BY LYNCH

<S>                                                                         <C>
Brighton Communications Corporation ..............................          100.0%
  Lynch Telephone Corporation IV .................................          100.0%

    Bretton Woods Telephone Company ..............................          100.0%
    World Surfer, Inc. ...........................................          100.0%

  Lynch Kansas Telephone Corporation .............................          100.0%
  Lynch Telephone Corporation VI .................................           98.0%

    JBN Telephone Company, Inc. ..................................           98.0%
      JBN Finance Corporation ....................................           98.0%

    Giant Communications, Inc. ...................................          100.0%
    Lynch Telephone Corporation VII ..............................          100.0%

      USTC Kansas, Inc. ..........................................          100.0%
       Haviland Telephone Company, Inc. ..........................          100.0%

        Haviland Finance Corporation .............................          100.0%
  DFT Communications Corporation .................................          100.0%

    Dunkirk & Fredonia Telephone Company .........................          100.0%
      Cassadaga Telephone Company ................................          100.0%

        Macom, Inc. ..............................................          100.0%
      Comantel, Inc. .............................................          100.0%

        Erie Shore Communications, Inc. ..........................          100.0%
        D&F Cellular Telephone, Inc. .............................          100.0%

    DFT Long Distance Corporation ................................          100.0%
    DFT Local Service Corporation ................................          100.0%

  LMT Holding Corporation ........................................          100.0%
    Lynch Michigan Telephone Holding Corporation .................          100.0%

        Upper Peninsula Telephone Company ........................          100.0%
        Alpha Enterprises Limited ................................          100.0%

          Upper Peninsula Cellular North, Inc. ...................          100.0%
          Upper Peninsula Cellular South, Inc. ...................          100.0%

  Lynch Telephone Corporation IX .................................          100.0%
    Central Scott Telephone Company ..............................          100.0%

        CST Communications Inc. ..................................          100.0%
  Global Television, Inc. ........................................          100.0%
  Inter-Community Acquisition Corporation ........................          100.0%
  Home Transport Service, Inc. ...................................          100.0%

  Lynch Capital Corporation ......................................          100.0%

  Lynch Entertainment, LLC .......................................          100.0%
  Lynch Entertainment Corporation II .............................          100.0%

  Lynch Multimedia Corporation ...................................          100.0%
    CLR Video, LLC ...............................................           60.0%
</TABLE>
<TABLE>
<CAPTION>


SUBSIDIARY                                                                      OWNED BY LYNCH

<S>                                                                       <C>
The Morgan Group, Inc. .....................................              70.0%(V)/55.4%(O)
  Morgan Drive Away, Inc. ..................................              70.0%(V)/55.4%(O)
    Transport Services Unlimited, Inc. .....................              70.0%(V)/55.4%(O)

  Interstate Indemnity Company .............................              70.0%(V)/55.4%(O)
  Morgan Finance, Inc. .....................................              70.0%(V)/55.4%(O)

  TDI, Inc. ................................................              70.0%(V)/55.4%(O)
    Home Transport Corporation .............................              70.0%(V)/55.4%(O)
    MDA Corporation ........................................              70.0%(V)/55.4%(O)

Lynch PCS Communications Corporation .......................              100.0%
  Lynch PCS Corporation A ..................................              100.0%
  Lynch PCS Corporation F ..................................              100.0%
  Lynch PCS Corporation G ..................................              100.0%
  Lynch PCS Corporation H ..................................              100.0%

Lynch Telecommunications Corporation .......................              100.0%
  Lynch Telephone Corporation ..............................               83.1%
    Western New Mexico Telephone Company, Inc. .............               83.1%
    Interactive Networks Corporation .......................               83.1%
    WNM Communications Corporation .........................               83.1%
    Wescel Cellular, Inc. ..................................               83.1%
      Wescel Cellular of New Mexico, L.P. ..................               42.4%
    Wescel Cellular, Inc. II ...............................               83.1%

      Northwest New Mexico Cellular, Inc. ..................               40.6%
      Northwest New Mexico Cellular of New Mexico, L.P. ....               20.7%
        Enchantment Cable Corporation ......................               83.1%
 Lynch Telephone II, LLC ...................................              100.0%

   Inter-Community Telephone Company, LLC ..................              100.0%
     Inter-Community Telephone Company II, LLC .............              100.0%
    Acquisition Corporation
   Valley Communications, Inc. .............................              100.0%
 Lynch Telephone Corporation III ...........................               81.0%

   Cuba City Telephone Exchange Company ....................               81.0%
   Belmont Telephone Company ...............................               81.0%
<FN>
 Notes: (V)=Percentage voting control; (O)=Percentage of equity ownership
</FN>
</TABLE>


<PAGE>


A.     ORGANIZATION

On August  12,  1999,  the Board of  Directors  of Lynch  Corporation  ("Lynch")
approved in principle the spin off to its  shareholders  of its  multimedia  and
services businesses as an independent  publicly-traded company (the "Spin-Off").
The multimedia and services  businesses  and the  independently  publicly-traded
company to which the assets and  liabilities  were  contributed  are hereinafter
referred  to  as  Lynch   Interactive   Corporation  (the  "Company"  or  "Lynch
Interactive"). Prior to and contemporaneous with the Spin Off, certain legal and
regulatory  actions were taken to perfect the  existence of the above  mentioned
affiliated multimedia and service companies as subsidiaries of Lynch Interactive
Corporation.  The Spin Off occurred on September 1, 1999. At the Spin Off, Lynch
distributed  100  percent  of the  outstanding  shares  of  common  stock of its
wholly-owned  subsidiary,  Lynch  Interactive,  to  holders of record of Lynch's
common stock as of the close of business on August 23, 1999. As part of the Spin
Off,  Lynch  Interactive  owns one million  shares of common  stock of Spinnaker
Industries,  Inc. representing an approximately 13.6% ownership interest (and an
approximate  2.5% voting  interest) and Lynch  Interactive  also assumed certain
short-term and long-term debt obligations of Lynch. Prior to the Spin Off, Lynch
Interactive succeeded to the credit facilities established by Lynch.

In April 1999,  Lynch received an Internal Revenue Service private letter ruling
that the  distribution  to its  shareholders  of the stock of Lynch  Interactive
qualifies  as  tax-free  for  Lynch and its  shareholders.  In  connection  with
obtaining  the  rulings  from the  Internal  Revenue  Service  ("IRS") as to the
tax-free nature of the Spin Off, Lynch made certain  representations to the IRS,
which include, among other things,  certain  representations as to how Lynch and
Interactive intend to conduct their businesses in the future.

B.    BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information and with the instructions to Form 10-Q and Article 10 and
11 of Regulation  S-X.  Accordingly,  they do not include all of the information
and footnotes required by generally accepted accounting  principles for complete
financial  statements.  In  the  opinion  of  the  management,  all  adjustments
(consisting  of  normal  recurring  accruals  considered  necessary  for a  fair
presentation  have been  included.  Operating  results for the nine month period
ended September  30,1999 are not necessarily  indicative of the results that may
be expected for the year ending December 31, 1999.

The accompying unaudited condensed consolidated financial statements include the
operations of the Company for the periods  subsequent to September 1, 1999,  and
the accompanying unaudited condensed combined financial statement the operations
of the  multimedia  and  services  businesses  and other assets  contributed  to
Interactive  for  the  periods  through  September  1,  1999  and are  based  on
historical  amounts included in the consolidated  financial  statements of Lynch
except that the Company's financial  statements reflect its investment in common
stock of Spinnaker in accordance with the provisions of SFAS No. 115 "Investment
in Debt and Equity Securities." As a result, the Company's financial  statements
reflect  an  increase  in  the  market  value  of  Spinnaker   common  stock  of
approximately  $10.2 million and $8.0 million after-tax at December 31, 1998 and
September 30, 1999, respectively. sHowever, the historical financial information
presented herein reflects periods during which the Company did not operate as an
independent  public company and  accordingly,  certain  assumptions were made in
preparing such  financial  information.  Such  information,  therefore,  may not
necessarily reflect the results of operations, financial condition or cash flows
of the Company in the future or what they would have been had the  Company  been
an  independent  public  company  during the reporting  periods.  Investments in
affiliates  in which the  Company  does not have  majority  voting  control  are
accounted for in accordance  with the equity method.  All material  intercompany
transactions  and balances have been  eliminated.  The Company  consolidates the
operating  results of its telephone and cable television  subsidiaries  (60-100%
owned at September 30, 1999) and The Morgan Group,  Inc., in which, at September
30,  1999,  the  Company  owned  70.1% of the  voting  power and 55.4% of common
equity.  The Company  accounts  for the  following  affiliated  Companies on the
equity  basis  of  accounting:  Coronet  Communications  Company  (20%  owned at
September  30,  1999),  Capital  Communications  Company,  Inc.  (49%  owned  at
September 30, 1999) and Fortunet Communications,  Inc. (49.9% owned at September
30, 1999). The shares of Spinnaker  Industries,  Inc., in which the Company owns
2.5% of the voting power and 13.6% of the common  equity,  are  accounted for in
accordance  with  Statement of  Financial  Accounting  Standards  (SFAS) No. 115
"Investments in Debt and Equity Securities."

Lynch has historically  provided  substantial  support services such as finance,
cash management, legal, and human resources to its various business units. Lynch
allocates the cost for these services among the business units  supported  based
principally on informal  estimates of time spent by the corporate office on both
Interactive  and Lynch  matters.  In the  opinion of  management,  the method of
allocating  these  costs is  reasonable;  however,  the costs of these  services
allocated to the Company are not necessarily  indicative of the costs that would
have been incurred by the Company on a stand-alone basis.

At the Spin Off, the  employees of the  corporate  office of Lynch Corp.  became
employees of the Registrant and the Registrant will provide corporate management
services to Lynch Corp. and will be charged a management fee for these services.

Lynch  Interactive  and Lynch have  entered into  certain  agreements  governing
various ongoing relationships, including the provision of support services and a
tax  allocation  agreement.  The  tax  allocation  agreement  provides  for  the
allocation of tax  attributes  to each company as if it had actually  filed with
the respective tax authority.

C.    ACQUISITIONS

On  July  16,  1999,  Lynch  Telephone  Corporation  IX,  a  subsidiary  of  the
Registrant,  acquired  by merger,  all of the stock of Central  Scott  Telephone
Company  for  approximately   $28.1  million  in  cash.  As  a  result  of  this
transaction, the Registrant recorded approximately, $18.9 million in preliminary
goodwill, which is being amortized over 25 years.

The above  acquisition  was accounted for as a purchase,  and  accordingly,  the
assets  acquired and  liabilities  assumed were recorded at their estimated fair
market values.

The operating  results of the acquired  company are included in the Consolidated
Statement of Operations  from its  acquisition  date.  The  following  unaudited
proforma information shows the results of the Registrant's  operations as though
the  acquisition  of  Central  Scott  was made at the  beginning  of  1998.  (In
Thousands of Dollars, except per share data.)

<TABLE>
<CAPTION>
                                         THREE MONTHS ENDED       NINE MONTHS ENDED
                                           SEPTEMBER 30,             SEPTEMBER 30,

(IN THOUSANDS, EXCEPT PER SHARE DATA)     1999         1998        1999        1998

<S>                                    <C>         <C>          <C>          <C>
Sales and Revenues .................   $  53,289   $  54,207    $ 158,603    $ 158,193
Operating Profit ...................       4,722       5,110       13,282       13,603

Income (Loss) from Continuing
  Operations Before Income Taxes and

  Minority Interest ................       1,782       2,905      (10,102)       6,737

Net Income (Loss) from Continuing ..
  Operations                                 689       1,413       (7,822)       3,212
Net Income (Loss) from Continuing

  Operations Per Share .............   $    0.49   $    1.00    $   (5.53)   $    2.27
</TABLE>

D. INDEBTEDNESS

On a  consolidated  basis,  at September  30,  1999,  the  Registrant  maintains
short-term and long-term lines of credit facilities  totaling $42.9 million,  of
which $16.0 million was available. The Registrant (Parent Company) maintains two
short-term  lines of credit  facilities  totaling $20.0  million,  of which $6.8
million was available at September 30, 1999. The parent company  facilities will
expire on August 31,  2000.  The Morgan  Group  maintains  lines and  letters of
credit totaling $20.0 million,  of which $9.2 million was available at September
30, 1999. These facilities,  as well as facilities at other  subsidiaries of the
Registrant,  generally  limit the credit  available under the lines of credit to
certain variables,  such as inventories and receivables,  and are secured by the
operating assets of the subsidiary, and include various financial covenants. Due
to certain of these  restrictive  covenants and working capital  requirements of
the  subsidiaries,  cash  distributions  from the subsidiaries  are limited.  At
September  30, 1999,  $2.9 million of these total  facilities  expire within one
year.

In general, the credit facilities are secured by property,  plant and equipment,
inventory,  receivables  and common  stock of certain  subsidiaries  and contain
certain covenants  restricting  distributions to the Registrant.

Long-term  debt  consists of (all  interest  rates are at September  30,  1999):
Interest  rates at December  31, 1998 were not  significantly  different  except
where noted.

<PAGE>


<TABLE>
<CAPTION>

                                                                               SEPTEMBER 30,        DECEMBER 31,

LONG TERM DEBT CONSISTS OF:                                                        1999                 1998
                                                                            --------------------  ------------------
<S>                                                                                <C>          <C>
Rural Electrification  Administration (REA) and Rural Telephone Bank (RTB) notes
payable  through  2027 at fixed  interest  rates  ranging  from 2% to 7.5% (4.8%
weighted  average),  secured  by assets  of the  telephone  companies  of $109.3
million ........................................................................   $  49,036    $  45,264

Bank Credit  facilities  utilized by certain  telephone  and  telephone  holding
companies  through 2009,  $47.8 million at a fixed  interest rate averaging 8.2%
($   33.7    million  aver31,  1998) and $14.0  million  at
variable interest rates averaging 7.3% ($16.9 million averaging 7.3% at December
31, 1998) ......................................................................      61,781       50,623

Unsecured  notes issued in connection  with  acquisitions  through 2006,  all at
fixed interest rates averaging 9.0%

                                                                                      28,114       28,003

Other ..........................................................................       3,283        3,773
                                                                                   ---------    ---------
                                                                                     142,214      127,663
Current Maturities .............................................................     (11,592)      (8,639)
                                                                                   ---------    ---------
                                                                                   $ 130,622    $ 119,024
                                                                                   =========    =========
</TABLE>

E. EARNINGS PER SHARE

In December 1997, the Registrant's  predecessor corporation adopted Statement of
Financial Accounting Standards("SFAS") No. 128, Earnings Per Share which changed
the  methodology  of calculating  earnings per share.  Basic earnings per common
share  amounts  are based on the  average  number of common  shares  outstanding
during each period,  excluding the dilutive  effects of options,  warrants,  and
convertible  securities.  Diluted  earnings per share reflect the effect,  Where
dilutive,  of the exercise of all stock  options  having an exercise  price less
than the greater of the average or closing market price at the end of the period
of the Common Stock of the  Registrant  using the  treasury  stock  method.  All
earnings per share  amounts have been  presented in accordance  with,  and where
appropriate, restated to conform to the SFAS No. 128 requirements.

F. COMPREHENSIVE INCOME

Effective January 1, 1998, the Registrant's predecessor corporation adopted SFAS
No. 130, Reporting  Comprehensive Income. SFAS No. 130 establishes standards for
reporting and display of comprehensive  income and its components;  however, the
adoption of SFAS No. 130 had no impact on the Company's net income. SFAS No. 130
requires  unrealized  gains or  losses  on the  Registrant's  available-for-sale
securities,  which prior to adoption  were reported  separately in  shareholders
equity  to  be  included  in  other  comprehensive  income.  The  components  of
comprehensive  income, net of tax, for the three and nine months ended September
30, 1999 and 1998 are as follows:
<TABLE>
<CAPTION>
                                     THREE MONTHS ENDED          NINE MONTHS ENDED
                                        SEPTEMBER 30               SEPTEMBER 30
                                       1999        1998     1999       1998
                                       ------    ------     -------   --------
<S>                                    <C>       <C>       <C>        <C>
Net income (loss) ..................   $ 1,070   $ 1,436   $(7,447)   $ 3,390
Unrealized gain (loss) on securities       198       150    (2,275)       750
                                       -------   -------   -------    -------
 Comprehensive income (loss) .......   $ 1,268   $ 1,586   $(9,722)   $ 4,140
                                       =======   =======   =======    =======
</TABLE>

The components of accumulated other comprehensive income, net of related tax, at
September 30, 1999 and December 31, 1998 are as follows:
<TABLE>
<CAPTION>
                                        1999       1998
                                       -------   --------
<S>                                    <C>       <C>
Unrealized gain (loss) on securities   $ 7,966   $10,241
                                       -------   -------
Accumulated comprehensive income ...   $ 7,966   $10,241
                                       =======   =======
</TABLE>



<PAGE>



K.  SEGMENT INFORMATION

The Company is  principally  engaged in two business  segments:  multimedia  and
services.  All  businesses  are  located  domestically,  and  substantially  all
revenues  are  domestic.   The  multimedia   segment  includes  local  telephone
companies,  a cable TV company, an investment in PCS entities and investments in
two  network-affiliated  television  stations.  The  services  segment  includes
transportation and related services.

EBITDA  (before  corporate  allocation)  for  operating  segments  is  equal  to
operating  profit  before  interest,  taxes,   depreciation,   amortization  and
allocated  corporate  expenses.  EBITDA  is  presented  because  it is a  widely
accepted  financial  indicator  of value and ability to incur and service  debt.
EBITDA is not a substitute  for  operating  income or cash flows from  operating
activities in accordance with generally accepted accounting principles.

Operating profit ( loss) is equal to revenues less operating expenses, excluding
unallocated general corporate expenses,  interest and income taxes. Prior to the
Spin Off,  Lynch  allocated a portion of its general  corporate  expenses to its
operating  segments.  Such  allocation to the Company was $158,000 for the three
months  ended  September  30,  1998,  and  $474,000  for the nine  months  ended
September  30, 1998.  Subsequent  to the Spin Off, the  Registrant  is providing
corporate management services to Lynch Corporation for a management fee.


<PAGE>
<TABLE>
<CAPTION>
                                                             THREE MONTHS ENDED           NINE MONTHS ENDED
                                                                SEPTEMBER 30,                 SEPTEMBER 30
                                                               1999          1998          1999           1998
                                                          -------------  ------------  ------------  -------------
Revenues:

<S>                                                         <C>          <C>          <C>          <C>
Multimedia ..............................................   $  15,513    $  14,196    $  42,855    $  40,520
Services ................................................      37,413       39,135      112,907      114,629
                                                            ---------    ---------    ---------    ---------
Combined Total ..........................................   $  52,926    $  53,331    $ 155,762    $ 155,149
                                                            =========    =========    =========    =========

EBITDA (before corporate allocation):

Multimedia ..............................................   $   8,482    $   7,547    $  28,396    $  21,738
Services ................................................         534        1,020        1,962        2,545
Corporate expenses, gross ...............................        (520)        (156)      (1,690)      (1,242)
                                                            =========    =========    =========    =========
Combined total ..........................................   $   8,496    $   8,411    $  23,668    $  23,041
                                                            =========    =========    =========    =========

Operating profit:

Multimedia ..............................................   $   4,572    $   4,052    $  12,140    $  11,580
Services ................................................         208          699          969        1,591
Unallocated corporate expense ...........................        (211)          18         (716)        (718)
                                                            =========    =========    =========    =========
Total operating profit for reportable segments ..........   $   4,569    $   4,769    $  12,393    $  12,453
                                                            =========    =========    =========    =========

Other profit or loss:

Investment income .......................................   $     682    $     757    $   1,716    $   2,357
Interest expense ........................................      (2,874)      (2,545)      (8,121)      (7,984)
Equity in earnings of affiliated companies ..............          44           44          147          169
Reserve for impairment of investment in PCS license
holders .................................................        --           --        (15,406)        --

Gain on sales of subsidiary and affiliate stock and other
operating assets ........................................        --           --           --             13
                                                            =========    =========    =========    =========
Income (loss) before income taxes, minority interests and
extraordinary item ......................................   $   2,412    $   3,025    $  (9,271)   $   7,008
                                                            =========    =========    =========    =========
</TABLE>

L.  Personal Communication Services

An Interactive  subsidiary has loans to and a 49.9% limited partnership interest
in Fortunet Communications, L.P. ("Fortunet"). Fortunet's only assets consist of
three 15MHz personal  communications  licenses that were acquired in the C-Block
auction held by the Federal Communications  Commission ("FCC"). In that auction,
Fortunet  acquired 30MHz licenses in these markets,  but on June 8, 1998,  under
FCC restructuring  options, it returned 15MHz of the original 30MHz acquired. On
April 15, 1999, the FCC completed the reauction of all the C-Block licenses that
were  returned to it since the original  C-Block  auction,  including  the three
15MHz licenses that Fortunet returned. In that reauction, the successful bidders
paid a total $2.7  million for the three  licenses as compared to $18.8  million
carrying  amount of Lynch's  investment in Fortunet.  Accordingly,  for the nine
months  September 30, 1999,  Lynch has recorded a write-down of $15.4 million in
its investment in Fortunet to reflect the amount bid for similar licenses in the
reauction,  plus an additional $0.7 million of capitalized expenses and interest
to leave a net carrying value of $3.4 million.




<PAGE>


                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF

                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SALES AND REVENUES

Revenues  for the first nine months of 1999  increased by $0.6 million to $155.8
million  from the first  nine  months of 1998.  Within the  operating  segments:
multimedia,  whose  revenues  increased  5.8%,  contributed  $2.3 million to the
increase and services revenues decreased $1.7 million.  This decline in services
revenues was primarily in the manufactured  housing  operation and was partially
offset by higher revenues in the specialized outsourcing operation. Manufactured
housing shipments  decreased eight percent in the quarter reflecting a weakening
demand in the retail sales of manufactured homes resulting in lower shipments by
some of the Company's major  customers.  These events have also in part resulted
in a decrease in the Company's market share measured as the percent of new homes
shipments.  The Company's current anticipation is that this market weakness will
continue for the  foreseeable  future  perhaps with the market  improving in the
second half of Year 2000.

Multimedia  revenues  grew  primarily  due to the  acquisition  of Central Scott
Telephone Company and partially to growth in both telecommunications services as
well as the provision of non-traditional telephone services such as Internet.

For the three  months  ended  September  30,  1999,  revenues  decreased by $0.5
million as the  acquisition  of Central  Scott  Telephone  Company  aided in the
multimedia's  revenue  increase  of  $1.2million,  which was  offset by  revenue
decrease at The Morgan Group due to the above-mentioned factors.

Operating  profit for the first nine months of 1999 decreased by $0.1 million to
$12.4  million from the first nine months of 1998 due to increase in  multimedia
offset by a decrease in services.  Operating  profit in the  multimedia  segment
increased by $0.6 million.  Morgan's  operating results decreased by $.6 million
due to a shift in revenue mix to lower margin business  partially offset by cost
reductions of $1.1 million.  Net corporate expense was $0.7 million in the first
nine months of 1999 and 1998.

Operating  profit for the three months ended September 30, 1999 decrease by $0.2
million  from the  previous  year due to lower  operating  profit at The  Morgan
Group,  which was not sufficient to offset the increased  operating  profit as a
result  of the  acquisition  of  Central  Scott  Telephone  Company,  net of the
goodwill  amortization.  Investment  income for quarter ended September 30, 1999
was slightly  lower than the three months ended  September 30, 1998 due to lower
investment balances.

Investment  income in the first nine months of 1999 of $1.7 million decreased by
$0.6 million from the first nine months of 1998 due to change in unrealized gain
(loss) of marketable securities, classified as trading.

Interest expense for the quarter increased by $0.3 million  predominantly due to
the acquisition of Central Scott Telephone  Company.  Interest expense increased
by $0.1  million  to $8.1  million  in the first  nine  months of 1999 from $8.0
million in the first nine months of 1998, as reduced  borrowings  were offset by
the lower  capitalized  interest on the Company's  investment in PCS licenses of
$1.2 million.

An Interactive  subsidiary has loans to and a 49.9% limited partnership interest
in Fortunet Communications, L.P. ("Fortunet"). Fortunet's only assets consist of
three 15MHz personal  communications  licenses that were acquired in the C-Block
auction held by the Federal Communications  Commission ("FCC"). In that auction,
Fortunet  acquired 30MHz licenses in these markets,  but on June 8, 1998,  under
FCC restructuring  options, it returned 15MHz of the original 30MHz acquired. On
April 15, 1999, the FCC completed the reauction of all the C-Block licenses that
were  returned to it since the original  C-Block  auction,  including  the three
15MHz licenses that Fortunet returned. In that reauction, the successful bidders
paid a total $2.7  million for the three  licenses as compared to $18.8  million
carrying  amount of Lynch's  investment in Fortunet.  Accordingly,  for the nine
months  September 30, 1999,  Lynch has recorded a write-down of $15.4 million in
its investment in Fortunet to reflect the amount bid for similar licenses in the
reauction,  plus an additional $0.7 million of capitalized expenses and interest
to leave a net carrying value of $3.4 million.

Also of note, Lynch  Interactive  announced that as a result of the contract for
the  acquisition  of East/West  Communications,  Inc.  (BULLETIN  BOARD:EWCM) BY
OMNIPOINT CORPORATION (NYSE:OMPT),  announced on Friday, October 22, 1999, Lynch
Interactive's  redeemable  preferred  stock of East/West,  which is currently on
Lynch  Interactive's  books for $4.5  million,  will be redeemed at  liquidation
value plus accrued  dividends at the time of closing.  This valuation  amount is
$8.5 million as of September 30, 1999.

The income tax provision  (benefit) includes federal, as well as state and local
taxes. The tax provision  (benefit) for the nine months ended September 30, 1999
and 1998,  represent  effective  tax rates of (43%) and 42%,  respectively.  The
differences from the federal statutory rate are principally due to the effect of
state income taxes and  amortization  of  non-deductible  goodwill.  Of note, no
state tax benefit has been provided for the reserve for the  impairment of $15.4
million in the investment in PCS license holders.

Minority  interest at $0.6 million was the same for both periods.  Of note,  the
reserve for impairment of PCS operations had no effect on minority interest.

Net loss for the nine months  ended  September  30,  1999 was ($7.4)  million or
$(5.26) per share as compared to a net income of $3.4 million or $2.39 per share
in the  previous  nine month  period.  The  reserve  for the  impairment  of the
investment in PCS license  holders ($10.2 million net of income tax benefit) was
the primary cause for the swing. Net income for the three months ended September
30,  1999 was $1.1  million,  or $0.76 per share  compared to net income of $1.4
million, or $1.01 per share for the same three month period in 1998.

In mid-July 1999, an Interactive  subsidiary  acquired  Central Scott  Telephone
Company   ("Scott")  for   approximately   $28.1  million  in  cash.  Scott  has
approximately 6,000 access lines in Scott County,  Iowa.  Interactive funded the
acquisition  principally through borrowings.  Scott had revenues of $4.4 million
in 1998. While Scott was profitable in 1998, Scott is not expected to contribute
to Interactive's earnings in 1999 due to interest expense on the financing debt.


<PAGE>


FINANCIAL CONDITION

LIQUIDITY/ CAPITAL RESOURCES

As of September  30, 1999,  the Company had current  assets of $60.1 million and
current  liabilities  of $25.6  million.  Working  capital was  therefore  $34.5
million as compared to $5.6 million at December 31, 1998.

The first nine months  capital  expenditures  were $8.2 million in 1999 and $7.1
million  in  1998.  Overall  1999  capital   expenditures  are  expected  to  be
approximately  $3.2 million above the 1998 level due to additional  expenditures
for the Company's Kansas telephone operations.

At September 30, 1999,  total debt was $158.3  million,  which was $13.0 million
more than the $144.9  million at the end of 1998. At September  30, 1999,  there
was $128.3  million of fixed interest rate debt averaging 7.0% and $30.1 million
of variable  interest rate debt averaging  7.8%.  Debt at year end 1998 included
$110.8 million of fixed interest rate debt, at an average  interest rate of 7.1%
and $34.1 million of variable  interest rate debt at an average interest rate of
7.6%.  Additionally,  the Company had $16.6 million in unused lines of credit at
December  31,  1998,  of which $8.7  million  was  attributable  to  Morgan.  At
September  30, 1999,  there was $16.0 million in unused lines of credit of which
Morgan had $9.2 million  available.  As of  September  30, 1999 and December 31,
1998,  Interactive borrowed $13.2 million and $15.2 million under two short-term
line of credit  facilities  with maximum  availability  totaling  $20.0 million.
These  short-term  lines  of  credit  expire  on  August  31,  2000.  Management
anticipates that these lines will be renewed when they expire.

On February 22, 1999, The Morgan Group, Inc. filed a Schedule 13E4, that invited
its  shareholders  to tender up to 100,000  shares of Class A common  stock,  to
Morgan at prices  not less than $8.50 nor  greater  than  $10.00 per share.  The
tender offer expired March 19, 1999,  whereby Morgan purchased 103,000 shares at
$9 per share.  Lynch  Interactive  did not tender any shares in response to this
offer.

Lynch  has  not  paid  any  cash  dividends  on its  Common  Stock  since  1989.
Interactive  does not expect to pay cash  dividends  on its Common  Stock in the
foreseeable  future.  Interactive  currently intends to retain its earnings,  if
any, for use in its business.

Future financings may limit or prohibit the payment of dividends.

Interactive has a high degree of financial  leverage.  As of September 30, 1999,
the ratio of total debt to equity was 5.1 to 1. Certain  subsidiaries  also have
high  debt to equity  ratios.  In  addition,  the debt at  subsidiary  companies
contains  restrictions  on the  amount of  readily  available  funds that can be
transferred to the respective parent of the subsidiaries.

The Company has a  significant  need for resources to fund future growth as well
as the  ongoing  operations  of the parent  company.  Interactive  is  currently
considering various alternative long and short-term financing arrangements.  One
alternative is the equity offering of Interactive  stock which Interactive has a
commitment  to make pursuant to the  representations  made to obtain its private
letter tax ruling.  Other  alternatives,  either in addition to or in lieu of an
Interactive  equity  offering,  include a sale of shares of Spinnaker stock or a
sale of a portion or all of certain  investment  in operating  entities,  either
directly  or  through  an  exchangeable   debt   instrument.   As  part  of  the
representations  made to the Internal  Revenue  Service in  connection  with the
private letter ruling,  Interactive has a commitment to enter into a minimum $15
million equity stock offering within one year of the Spin Off. While  management
expects to obtain adequate financing resources to enable the Company to meet its
obligations,  there is no  assurance  that such can be  readily  obtained  or at
reasonable costs.

Lynch  Interactive  is conducting  detailed  negotiations  regarding the private
placement of an approximately $25 million immediate term, interest bearing note,
convertible  into Lynch  Interactive  stock at a standard  premium to the market
price of Interactive stock. The negotiations include an option by the purchaser,
to sell the note to the Chairman of Lynch  Interactive  one year after issuance.
There can be no  assurance,  whether  because of market or business  conditions,
reasons specific to the parties or otherwise, that the contemplated terms of the
note will not change or that the transaction will be consummated.

Lynch  Interactive is also actively  pursuing  acquisitions  of rural  telephone
companies.  Specifically,  it is holding  detailed  negotiations  regarding  the
potential acquisition of a rural telephone company,  which also has cellular and
other  telecommunications  interests,  in the general magnitude (though somewhat
smaller) of its recent acquisition of Central Scott Telephone Company.

YEAR 2000

The Company has  initiated a  comprehensive  review of its  computer  systems to
identify  the  systems  that could be  affected  by the "Year 2000" issue and is
developing and conducting an implementation  plan to resolve the issue. The Year
2000 problem is the result of computer  programs  being written using two digits
(rather than four) to define the applicable year. Any of the Company's  programs
or programs utilized by vendors to the Company that have time-sensitive software
may recognize a date using "00" as the year 1900 rather than the year 2000. This
could result in a major system  failure or  miscalculation.  The Company's  Year
2000  review is being  performed  primarily  by internal  staff,  and in certain
operations is supplemented  by outside  consultants.  The principal  Information
Technology  ("IT")  systems  that  may be  impacted  by the  Year  2000  for the
Company's  telecommunications  operations are central office switching,  billing
and  accounting.  The  principal IT systems for the Morgan Group are order entry
dispatch and  accounting.  The Year 2000 may also impact various non-IT systems,
including among other things  security  systems,  HVAC,  elevator  systems,  and
communications  systems.  In addition,  each of the Company's  businesses may be
impacted by the Year 2000 readiness of third party vendors/suppliers.

Due to the integral nature of switching  equipment and billing software to their
operations, the telecommunications businesses are most effected by the Year 2000
issue. The majority of the telephone  companies'  switching and billing software
is Year 2000  compliant,  with the  remaining  expected to be  compliant  in the
fourth  quarter of 1999.  The  telecommunications  businesses  rely on switching
equipment  and software  provided by third party  vendors.  It is the  Company's
understanding  that the vendors have completed  testing of the software and that
no additional  action by the Company will be required  after  installation.  The
telecommunications  businesses  periodically upgrade switching software in order
to remain current with respect to service features.  The upgrades provided other
enhanced  service features as well as included Year 2000 readiness and have been
capitalized. Other remediation costs, including internal costs have been charged
to  expense  as  incurred.  The  total  cost of Year  2000  remediation  for the
telecommunications  businesses is estimated to be approximately $1.1 million, of
which approximately $0.7 million has been spent to date. The  telecommunications
businesses have for the most part, developed contingency plans in the event that
steps taken are not successful.

The Morgan  Group,  Inc. is in the process of  remediating  the Year 2000 issue,
primarily  through the  replacement  of a  significant  portion of its operating
software.  Implementation  was  completed  in  July  1999,  with  final  testing
completed  in  September  1999.  The  total  cost of Year  2000  remediation  is
estimated to be approximately $0.4 million,  of which approximately $0.3 million
has been spent to date. Costs  specifically  associated with modifying  internal
use software are charged to expense as incurred.  Morgan presently believes that
its Year 2000  compliance  program  will  essentially  be  completed on a timely
basis, posing no significant internal operations problems.  Management,  at this
time, sees no need for a contingency plan for internal Year 200 software issues.

The estimated  costs and projected  dates of completion  for the Company's  Year
2000  program  are based on  management's  estimates  and were  developed  using
numerous  assumptions of future  events,  some of which are beyond the Company's
control.  The Company  presently  believes that with  modifications  to existing
software  and  converting  to new  software,  the Year 2000  issue will not pose
significant  operational  problems  for the  Company  as a  whole.  The  Company
believes  it has  substantially  completed  the  modifications  and  conversions
required to be Year 2000  compliant  and  anticipates  to be fully  completed in
adequate  time.  In  addition,  the  Company  is in the  process  of  developing
contingency  procedures  with regard to significant  systems.  However,  if such
modifications and conversions and contingency  procedures are not effective,  or
if key third parties,  suppliers or customers experience Year 2000 problems, the
Year 2000 issue may  materially  and adversely  impact the  Company's  financial
condition, results of operations and cash flows.

MARKET RISK

The Company is exposed to market risk  relating to changes in the general  level
of U.S. interest rates. Changes in interest rates affect the amounts of interest
earned  on  the  Company's   cash   equivalents   and   short-term   investments
(approximately $21.0 million at September 30, 1999 and $28.0 million at December
31, 1998). The Company generally finances the debt portion of the acquisition of
long-term  assets  with  fixed  rate,  long-term  debt.  The  Company  generally
maintains  the majority of its debt as fixed rate in nature  either by borrowing
on a fixed long-term  basis or, on a limited basis,  entering into interest rate
swap agreements.  The Company does not use derivative financial  instruments for
trading or speculative  purposes.  Management  does not foresee any  significant
changes in the strategies  used to manage interest rate risk in the near future,
although the strategies may be reevaluated as market conditions dictate.

At September  30, 1999,  approximately  $30.1  million,  or 19% of the Company's
long-term debt and notes payable bears interest at variable rates.  Accordingly,
the Company's earnings and cash flows are affected by changes in interest rates.
Assuming the current level of  borrowings  for variable rate debt and assuming a
one  percentage  point  change in the 1999  average  interest  rate under  these
borrowings,  it is estimated that the Company's 1999 nine month interest expense
would have changed by $-- million. In the event of an adverse change in interest
rates,  management  would likely take actions to further  mitigate its exposure.
However,  due to the  uncertainty  of the actions  that would be taken and their
possible effects,  the analysis assumes no such actions.  Further,  the analysis
does not  consider  the  effects of the change in the level of overall  economic
activity that could exist in such an environment.

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

Included in this Management  Discussion and Analysis of Financial  Condition and
Results of Operations and Item 5 below are certain forward looking financial and
other  information,  including without limitation matters relating to East/West,
possible financings,  possible acquisitions,  Year 2000 matters and Market Risk.
It should be recognized  that such  information  are  projections,  estimates or
forecasts based on various  assumptions,  including without limitation,  meeting
its  assumptions  regarding  expected  operating  performance  and other matters
specifically set forth, as well as the expected performance of the economy as it
impacts the  Registrant's  businesses,  government  and  regulatory  actions and
approvals,  and tax consequences and risk factors and cautionary  statements set
forth in documents  filed by Registrant and The Morgan Group with the Securities
and  Exchange   Commission.   As  a  result,  such  information  is  subject  to
uncertainties, risks and inaccuracies, which could be material.

Item 3.  Quantitative and Qualitative Disclosure About Market Risk

                  See "Market Risk" under Item 2 above.

PART II OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

              (a)     Exhibits

              27 -       Financial Data Schedule

              (b) Reports on Form 8-K

                  Report on Form 8-K filed August 26, 1999 (relating to Morgan)


<PAGE>


                                   SIGNATURES

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

                          LYNCH INTERACTIVE CORPORATION

                                                    (Registrant)

                             BY: S/ROBERT E. DOLAN

                                  Robert E. Dolan
                                  Chief Financial Officer

 November 15, 1999