As filed with the Securities and Exchange Commission on January 22, 1998
                                                    Registration No. 
--------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    Form S-1

                             Registration Statement
                                      Under
                           The Securities Act of 1933

                             COMPUTER CONCEPTS CORP.
             (Exact Name of Registrant as Specified in its Charter)

       Delaware                    [8980]                     11-2895590
-----------------------    ---------------------------     ---------------------
 (State or Jurisdiction   (Primary Standard Industrial        (IRS Employer
of Incorporation or        Classification Code Number)     Identification Number
   Organization)
                                               Daniel DelGiorno, Jr., President
                                               Computer Concepts Corp.
       80 Orville Drive                        80 Orville Drive
       Bohemia, New York 11716                 Bohemia, New York 11716
          (516) 244-1500                           (516) 244-1500
---------------------------------    -------------------------------------------
(Address and telephone number, of   (Name, address and telephone number of agent
principal executive offices and                    for service)
  principal place of business)                    

  Approximate date of commencement of proposed sale to the public: As soon as
        practicable after the Registration Statement becomes effective.

  If any of the securities being registered on this Form are to be offered on a
  delayed or continuous basis pursuant to Rule 415 under the Securities Act of
                       1933, check the following box [X].

     If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
    and list the Securities Act registration statement number of the earlier
          effective registration statement for the same offering [ ].

                         CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=============================================================================================================
                                                 Proposed  Maximum     Proposed Maximum
  Title of Each Class of         Amount to be    Offering Price Per    Aggregate Offering       Amount of
Securities to be Registered      Registered(1)      Security(2)             Price (2)        Registration Fee
-------------------------------------------------------------------------------------------------------------
<S>                              <C>                 <C>                 <C>                   <C>   
Common Stock, $.0001 Par Value      11,747,318         $.46875             $5,506,555           $1,625
=============================================================================================================
<FN>
(1) Includes 420,000 shares issuable upon exercise of options or warrants.
(2) Estimated  solely for purposes of calculating the  registration fee pursuant
    to rule 457 under the Securities Act of 1933,  based on the average high and
    low reported sale prices on the National  Association of Securities Dealers,
    Inc. Automated Quotations System on January 16, 1998.
</FN>
</TABLE>

    The  Registrant  hereby amends this  Registration  Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further  amendment  which  specifically  states  that  this  Registration
Statement shall  thereafter  become effective in accordance with Section 8(a) of
the  Securities  Act of 1933 or until the  Registration  Statement  shall become
effective on such date as the Commission,  acting pursuant to said Section 8(a),
may determine.
================================================================================
<PAGE>

                             COMPUTER CONCEPTS CORP.

                              CROSS REFERENCE SHEET

<TABLE>
<CAPTION>

        Registration Statement
        Item Number and Heading                     Location in Prospectus
        -------------------------                   ----------------------

<S>                                              <C>
1.   Forepart of Registration Statement 
     and Outside Front . . . . . . . . . . . . .  Cover Page
     Cover Page of Prospectus
2.   Inside Front and Outside Back Cover 
     Pages of Prospectus . . . . . . . . . . . .  Summary, Risk Factors
3.   Summary Information and Risk Factors  . . . 
4.   Use of Proceeds . . . . . . . . . . . . . .  Use of Proceeds
5.   Determination of Offering Price . . . . . .  Cover Page; Risk Factors;
                                                  Selling Security holders
6.   Selling Security holders. . . . . . . . . .  Selling Security holders
7.   Dilution. . . . . . . . . . . . . . . . . .  Not Applicable
8.   Plan of Distribution. . . . . . . . . . . .  Plan of Distribution; Risk Factors;
                                                  Management; Selling Security holders
9.   Description of Securities . . . . . . . . .  Description of Securities
10.  Interests of Named Experts and Counsel  . .  Legal Matters; Experts
11(a).Description of Business. . . . . . . . . .  The Company; Business
11(b).Description of Property. . . . . . . . . .  Business - Property
11(c).Legal Proceedings. . . . . . . . . . . . .  Business - Legal Matters
11(d).Market for Common Equity and Related 
      Stockholder Matters  . . . . . . . . . . .  Cover Page; Security Ownership of Certain
                                                  Beneficial Owners and Management;
                                                  Description of Securities
11(e).Financial Statements . . . . . . . . . . .  Financial Statements
11(f).Selected Financial Data  . . . . . . . . .  Selected Financial Data
11(g).Supplementary Financial Information  . . .  Financial Statements
11(h).Management's Discussion and Analysis or 
      Plan of Operation  . . . . . . . . . . . .  Management's Discussion and Analysis of
                                                  Financial Condition and Results of Operations
11(i).Changes in and Disagreements with 
      Accountants on Accounting and Financial 
      Disclosure . . . . . . . . . . . . . . . .  Changes in Accountants
11(j).Directors, Executive Officers, Promoters 
      and Control Persons  . . . . . . . . . . .  Management
11(k).Executive Compensation . . . . . . . . . .  Management
11(l).Security Ownership of Certain Beneficial
      Owners and . . . . . . . . . . . . . . . .  Security Ownership of Certain Beneficial
      Management                                  Owners and Management
11(m).Certain Relationships and Related 
      Transactions   . . . . . . . . . . . . . .  Certain Transactions
12.  Disclosure of Commission Position on 
     Indemnification for Securities Act 
     Liabilities . . . . . . . . . . . . . . . .  Management, Part II
13.  Other Expenses of Issuance and Distribution  Part II
14.  Indemnification of Directors and Officers .  Management; Part II
15.  Recent Sales of Unregistered Securities . .  Part II
16.  Exhibits and Financial Statement Schedules.  Part II
17.  Undertakings. . . . . . . . . . . . . . . .  Part II
</TABLE>
<PAGE>

Information   contained  herein  is  subject  to  completion  or  amendment.   A
registration  statement  relating  to these  securities  has been filed with the
Securities  and Exchange  Commission.  These  securities may not be sold nor may
offers to buy be accepted prior to the time the registration  statement  becomes
effective.  This  prospectus  shall  not  constitute  an  offer  to  sell or the
solicitation of an offer to buy nor shall there be any sale of these  securities
in any State in which such offer,  solicitation  or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.






<PAGE>

                 SUBJECT TO COMPLETION, DATED JANUARY 22, 1998

PRELIMINARY PROSPECTUS



                             COMPUTER CONCEPTS CORP.

                        11,747,318 Shares of Common Stock


     This  Prospectus  relates to 11,747,318  shares of Common Stock,  par value
$.0001 per share,  of  Computer  Concepts  Corp.,  a Delaware  corporation  (the
"Company"). See "Description of Securities" and "Selling Security holders."

   The Common Stock offered by this  Prospectus may be sold from time to time by
the  Selling  Security  holders,  or  by  their  transferees.   No  underwriting
arrangements  have  been  entered  into by the  Selling  Security  holders.  The
distribution of the securities by the Selling  Security  holders may be effected
in one or more transactions that may take place on the over-the-counter  market,
including ordinary broker's transactions,  privately-negotiated  transactions or
through  sales to one or more dealers for resale of such shares as principals at
market  prices  prevailing  at the  time of  sale,  at  prices  related  to such
prevailing  market  prices  or at  negotiated  prices.  Usual and  customary  or
specifically negotiated brokerage fees or commissions may be paid by the Selling
Security holders in connection with sales of such securities.

   The Selling Security holders and intermediaries  through whom such securities
may be sold may be deemed  "underwriters"  within the meaning of the  Securities
Act of 1933,  as  amended  ("Securities  Act") with  respect  to the  securities
offered  and  any  profits  realized  or  commissions  received  may  be  deemed
underwriting  compensation.  The  Company  has agreed to  indemnify  the Selling
Security holders against certain  liabilities,  including  liabilities under the
Securities Act.

   The Company will bear the expenses of this offering, including filing fees.

     The  Company's  Common Stock is traded on NASDAQ  (NASDAQ  SmallCap  Market
symbol:  CCEE).  On  January  16,  1998 , the last  reported  sale  price of the
Company's Common Stock as reported by NASDAQ was $.46875 per share.

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

                 AN INVESTMENT IN THE SECURITIES OFFERED HEREBY
                       INVOLVES A HIGH DEGREE OF RISK AND
         SHOULD BE CONSIDERED ONLY BY INVESTORS WHO CAN AFFORD THE LOSS
                           OF THEIR ENTIRE INVESTMENT.
                               SEE "RISK FACTORS.
                        --------------------------------

          THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
           SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
      COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION
            PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
            ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
                        --------------------------------

                 The date of this Prospectus is _________, 1998
<PAGE>

                           REPORTS TO SECURITY HOLDERS

       The Company intends to furnish its shareholders with annual reports
containing  audited  financial  statements,  examined by an  independent  public
accounting  firm, and such interim  reports as it may determine to furnish or as
may be required by law.  The  Company's  fiscal year ends on December 31 of each
year.

                              AVAILABLE INFORMATION

   The  Company  has filed with the  Securities  and  Exchange  Commission  (the
"Commission"),  Washington,  D.C., a Registration Statement on Form S-1 pursuant
to the  Securities  Act of 1933,  as amended  (the  "Act"),  with respect to the
Common  Stock  offered  hereby.   This  Prospectus  does  not  contain  all  the
information set forth in the  Registration  Statement and the exhibits  relating
thereto.  For further  information with respect to the Company and the shares of
Common Stock offered by this Prospectus,  reference is made to such Registration
Statement and the exhibits thereto.  Statements  contained in this Prospectus as
to the contents of any contract or other document are not  necessarily  complete
and in each  instance  reference  is made to the copy of such  contract or other
document filed as an exhibit to the Registration  Statement for a full statement
of the provisions thereof;  each such statement contained herein is qualified in
its entirety by such reference.

   The Company's  Common Stock is registered  with the  Securities  and Exchange
Commission,  Washington,  D.C. 20549,  under the provisions of Section 12 (g) of
the  Securities  Exchange Act of 1934,  as amended  (the  "Exchange  Act").  The
Company is subject to the informational requirements of the Exchange Act, and in
accordance therewith files reports,  proxy statements and other information with
the  Commission.  Such reports,  proxy  statements and other  information can be
inspected and copied at the public reference facilities maintained at the office
of the Commission at Room 1024, 450 Fifth Street, N.W.,  Washington,  D.C. 20549
and at the Commission's Regional Offices at Suite 788, 1375 Peachtree St., N.E.,
Atlanta,  Georgia 30367,  Northwestern  Atrium Center,  500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511 and 7 World Trade Center, New York, New
York 10048.  Copies of such material can be obtained  from the Public  Reference
Section of the  Commission,  Washington,  D.C.  20549,  at prescribed  rates. In
addition,  the Company's  Common Stock is listed on the National  Association of
Securities  Dealers,  Inc.  Automated  Quotations  System,  and  copies  of  the
foregoing  materials  and  other  information  concerning  the  Company  can  be
inspected at the offices of the National Association of Securities Dealers, Inc.
at 1735 K Street, N.W., Washington, D.C. 20006.



<PAGE>


                               PROSPECTUS SUMMARY

   The  following  summary is  qualified  in its  entirety by the more  detailed
information and financial statements appearing elsewhere in this Prospectus.

                                   THE COMPANY

     Computer Concepts Corp.  (hereinafter referred to as "Computer Concepts" or
the "Company") was organized  under the name Unique  Ventures,  Inc.,  under the
laws of the  State of  Delaware  on  August  27,  1987.  Unique  Ventures,  Inc.
thereafter became a "blind-pool" public company and changed its name to Computer
Concepts Corp. in 1989.

   The Company  designs,  develops,  markets and supports  information  delivery
computer software  products,  including  end-user data access tools for personal
computers and systems management  software products for corporate mainframe data
centers.  This  business has been built through a  combination  of  development,
acquisitions and a strategic partnership.

   During the years 1989  through  1992,  the Company was  primarily  engaged in
research and development activities regarding its primary product,  "d.b.Express
 ." During 1993,  the Company began to expand its product,  sales,  marketing and
administrative  activities,  and  began  the  transition  from  a  research  and
development-oriented company into a market-driven software products business. In
1994,  the  Company  continued  the process of  evaluating  its  businesses  and
determining  where its strategic  focus and financial and  management  resources
should be directed.  As a result,  for the fourth  quarter of 1994,  the Company
adjusted the value of certain assets to reflect their net  realizable  value and
management's  current  operating  plan.  In 1995,  1996 and  1997,  the  Company
determined to further focus its activities to its Softworks, Inc. subsidiary and
exploitation  of the parent  Company's  d.b.Express  software  technology and in
1996, sold its "Superbase"  technology assets and in 1997 sold the net assets of
its MapLinx Inc.  subsidiary.  As a result, for the third and fourth quarters of
1995 and for the  fourth  quarter of 1996,  the  Company  adjusted  the value of
certain assets to reflect their net realizable value.

   In October 1990, Computer Concepts acquired RAMP Associates, Inc. ("RAMP"), a
privately  owned Delaware  corporation  engaged in general  computer  consulting
services.  RAMP was  previously  owned by Russell  Pellicano,  the  inventor  of
d.b.Express,  and  currently a director and officer of the  Company.  During the
fourth  quarter of 1993, in connection  with its long-term  strategic  plan, the
Company eliminated its general computer consulting service line, taking a charge
for the write-off of the  unamortized  goodwill  associated with RAMP as well as
the accrual of certain severance costs.

   Effective September 1993, the Company acquired Softworks, Inc. ("Softworks"),
a private Maryland company founded in 1977, and an acknowledged leader providing
systems management software for mainframe computer systems.  Softworks currently
markets  twenty-four  software  products,  and holds over 2,400 licenses in over
1,800  customer   installations   worldwide.   The  products  are  installed  in
approximately 80 of the Fortune 100 companies' data centers. See Note 3 of Notes
to Consolidated Financial Statements for the year ended December 31, 1996 .

   During  June 1994,  the  Company  completed  the  purchase  of the  Superbase
technology  and certain  related  assets from Software  Publishing  Corporation.
Superbase is a database programming language. The Company sold this asset in the
second quarter of 1996. See Note 3 of Notes to Consolidated Financial Statements
for the year ended December 31, 1996.

   During  December 1994, the Company  acquired  MapLinx,  Inc.  ("MapLinx"),  a
provider of PC based  software  that  allows for  geographical  presentation  of
database  information.  See  Notes 3 and 12 of Notes to  Consolidated  Financial
Statements  for the year  ended  December  31,  1996.  In  conjunction  with the

<PAGE>

Company's  decision to focus its activities on  exploitation  of the d.b.Express
technology  and its  Softworks  subsidiary,  the Company  sold the net assets of
MapLinx in 1997.

   During December 1994, through its Softworks' subsidiary, the Company acquired
DBopen,  Inc.  ("DBopen"),  a  provider  of  PC  database  administration  tools
employing  client/server  technology.  During the third quarter of 1995, certain
new products  pertaining  to this  acquisition  were  introduced  in the market.
During the fourth  quarter of 1995,  as a result of limited  sales and  changing
market conditions,  it was determined that significant  additional  expenditures
would have to be incurred to modify the  product to meet these  changing  market
conditions. In the opinion of management,  such additional expenditures exceeded
the potential benefits, and accordingly,  a decision was made to discontinue the
products.  Consistent  with this  decision,  the Company  wrote off the carrying
value of its  investment in the DBopen  acquisition  of $1,317,000 in the fourth
quarter of 1995.

   The Company's  long-term  strategic  plan is focused on becoming a preeminent
provider of  innovative  software  products  which break down  barriers  between
people  and  data  (thereby  allowing  corporate  users  to more  easily  access
enterprise-wide data) through sales of existing products and new technologies as
well as continuing to support the Softworks'  mainframe  sector. To achieve this
plan, the Company plans growth of d.b.Express  primarily through the development
of several vertical markets.  Telecommunications  is presently being targeted as
one of the first vertical  markets.  Additionally the Company will also focus on
software tools for the data warehousing markets.  These markets are being driven
by wide-scale  corporate  right-sizing  and the  empowerment of people to access
enterprise-wide  data, both of which create greater  efficiencies  and corporate
profits.  Additionally, a new, potentially significant,  component in Softworks'
strategic plan is Softworks' Year 2000 technology which positions the Company to
capitalize  on  providing  solutions  for  certain  elements  of  the  impending
world-wide  year 2000  problem.  In addition to the  d.b.Express  and  Softworks
product lines, the Company has a newly formed business unit which is designed to
provide a wide  array of  information  technology,  support  and  services.  The
Company has employed an individual formerly with I.B.M. having expertise in this
field and intends to capitalize  on his  experience  and  competency in order to
create a unique,  single  management  infrastructure  to  support  an  extensive
selection of services  and  vendors.  The  Company's  new  business  line offers
solutions,  support,  and  strategies to solve various  business  crises in such
areas as: network determinations,  help desk applications,  wiring/cabling,  LAN
connections,  moves/adds/changes,  and project management, as well as overseeing
new installations and offering on-site component repair.

     During the first quarter of 1995,  the Company  reorganized  its management
team. A new business plan was developed and implemented, with the major focus of
the new business plan being the development of strategic alliances, and securing
d.b.Express  license  agreements  with major software  companies which has since
been  further  refined to focus on  selected  vertical  markets  with an initial
emphasis on the  telecommunications  market.  The first  evidence  of  potential
future  success of this plan was  announced on June 1, 1995 when the Company and
Oracle Corporation  entered into a development  agreement.  The Company also has
entered into  development  or license  agreements  with IBM, Dell  Computers and
Information  Builders,  Inc.,  however,  the  Company  was advised in the second
quarter  of 1996 that Dell  Computers  was  discontinuing  the  distribution  of
d.b.Express.  Additionally,  the Company  entered  into a  world-wide  marketing
agreement  with Perot Systems  Corporation  in December,  1995, and on April 12,
1996, the Company confirmed the signing of a contract with the State of New York
permitting all State agencies and divisions to acquire  d.b.Express  however the
contract  does not  guarantee  any  minimum  number of  orders.  The  Company is
currently in negotiations  with several other national  corporations and leading
software  companies for the licensing of d.b.Express.  None of these  agreements
provide for any sales commitments,  and to date, sales from such agreements have
been  insignificant.  Recently,  pursuant to the  Company's  shift to pursuing a
vertical market, the telecommunications  industry, the Company announced that it
has signed an agreement  with a major  telecommunications  company from which it
anticipates the receipt of significant d.b.Express revenues in 1998; the Company
will  receive an initial  payment in excess of  $700,000  and share in  revenues
generated  by  the  technology   thereafter.   Management  believes  that  other
negotiations may

<PAGE>

result in the  consummation of additional  strategic  alliances  and/or software
license   agreements  within  the  foreseeable  future  although  there  are  no
assurances such agreements will occur.

   Pursuant to the  authorization  granted at the  Company's  Annual  Meeting of
Shareholders held March 20, 1996, the Company's  authorized capital was increase
to 150,000,000 shares of Common Stock on March 22, 1996.

   At the  Company's  Annual  Meeting of  Shareholders  held  November 26, 1997,
authorization  for an amendment to the Company's  Articles of  Incorporation  to
increase  its  authorized  capital  from  150,000,000  shares of Common Stock to
300,000,000  shares of Common Stock was approved,  and authorization to effect a
reverse  stock  split at a ratio  of 1 for 2 up to 1 for 10,  was  approved.  No
action has been taken in regard to any of these authorizations,  and the Company
does not currently have plans to take action.  Therefore,  there is no assurance
that either, both or neither of the authorized actions will be effected.

     During 1996,  the Company  strengthened  its corporate  management  team by
retaining consultants to oversee, direct and supervise the operations as well as
sales and  marketing.  Further,  during the  second  half of 1996,  the  Company
retained  additional key employees at both corporate and Softworks.  The Company
believes  that the  increase in and  strengthening  of upper  level  management,
throughout  the  corporation  will aid and improve its  performance  in the near
future.  With respect to the d.b.Express  technology,  the Company is continuing
its efforts to develop strategic  alliances,  and securing  d.b.Express  license
agreements with major software  companies,  as well as pursue specific  vertical
markets, such as telecommunications.  In this regard, the Company announced that
its d.b.Express  technology has been integrated into British Telecom's Syncordia
Services' C-View  application which allows customers to remotely access over the
Internet a wide variety of account information maintained in Syncordia's central
data repository.  The d.b.Express  technology enables the customer to access the
data  without the need to download  the data first and is believed to provide at
least one  solution  to that aspect of the  Internet  "bandwidth"  problem.  The
Company  recently  announced  that  it had  signed  an  agreement  with a  major
telecommunications  company and anticipates  receipt of significant  d.b.Express
revenues therefrom in 1998, however, due to contractual restrictions the Company
is  presently  limited  from  further  disclosures  regarding  the  terms of the
agreement.


   See "Risk Factors",  "Management" and "Certain Transactions" for a discussion
of certain  factors that should be considered in evaluating  the Company and its
business.


<PAGE>



                              THE OFFERING
<TABLE>

<S>                                                          <C>                             
Securities Offered by the Selling Security holders. .        11,747,318 Shares of Common Stock

NASDAQ SmallCap Market Symbol
   for Common Stock . . . . . . . . . . . . . . . . .        CCEE

Risk Factors. . . . . . . . . . . . . . . . . . . . .        Purchase of Common Stock being offered
                                                             hereby involves a significant degree of risk,
                                                             including the potential loss of all funds
                                                             invested, and including risks associated
                                                             with the need for additional funds, a
                                                             limited operating history, intense
                                                             competition, rapid growth, and dependence
                                                             on key personnel, among others.  See
                                                             "Risk Factors."

Number of shares outstanding if all securities
offered are sold (including  420,000 shares
included herein issuable upon exercise of
options or warrants, and 12,744,229 shares issuable
upon exercise of options or warrants previously
issued) . . . . . . . . . . . . . . . . . . . . .            146,793,505
</TABLE>

<PAGE>


                         SUMMARY FINANCIAL INFORMATION

         The following summary financial information  concerning the Company has
been derived from the Consolidated Financial Statements, related notes and other
financial  information  included elsewhere in this Prospectus and should be read
in conjunction with such financial  statements and the notes thereto.  All share
and per share data has been adjusted to reflect the  one-for-four  reverse stock
split  approved  by the Company's  shareholders  on  September  22,  1992.  This
information  should  be read in  conjunction  with  the  Consolidated  Financial
Statements:

         Summary Consolidated Statement of Operations Data
<TABLE>
<CAPTION>
                                  Nine Months Ended
                                     September 30          Years Ended December 31,
                                  -----------------        ------------------------
                                         (in thousands, except per share data)

                                   1997     1996      1996      1995      1994      1993     1992
                                   ----     ----      ----      ----      ----      ----     ----


<S>                              <C>       <C>       <C>       <C>       <C>       <C>     <C>     
Revenues                         $19,931   $12,144   $19,030   $16,302   $13,695   $3,360 $     97
                                 -------   -------   -------   -------   -------   ------  -------  
Total costs and expenses          32,455    21,418    35,173    34,667    25,474   16,699    5,074
                                 -------   -------   -------    ------   -------   ------  -------  

Operating loss                  $(12,524)  $(9,274)  (16,143)  (18,365)  (11,779) (13,339)  (4,977)
Other income (expense)              (475)   (2,810)   (2,810)     -         (428)    (111)       1
                                 -------   -------   -------   -------   -------  -------  -------    

Net loss                        $(12,999) $(12,084) $(18,953) $(18,365) $(12,207)$(13,450) $(4,976)
                                 =======   =======   =======   =======  ========  =======  =======

Net loss per share                 $(.12)    $(.18)   $(0.27)   $(0.37)   $(0.51)  $(0.86)  $(0.40)
                                 =======   =======   =======   =======   =======  =======  =======  

Weighted average common 
shares outstanding               106,897    66,052    71,301    49,211    24,110   15,721   12,332
                                 =======   =======   =======   =======   =======  =======  =======

</TABLE>




  Summary Consolidated Balance Sheet Data
<TABLE>
<CAPTION>

                               At September 30,             At December 31,
                               ----------------             ---------------
                                               (In thousands)


                                  1997      1996      1996      1995       1994     1993    1992   
                                  ----      ----      ----      ----       ----     ----    ---- 

<S>                               <C>      <C>       <C>      <C>        <C>      <C>      <C>   
Working capital (deficit)         $1,334   $3,694    $2,809   $(2,998)   $(3,590) $2,545   $(610)
Total assets                      33,737   25,265    27,671    16,081     21,609  20,607   4,044
Long term debt                       280    2,695       526       800        695     172     163
Long term debt - current portion     453      381       458       359        119      53      26
Common stock subject to redemption     -        -               4,000      4,000       -       -
Shareholders' equity               8,497    6,385     9,524     2,009      7,839  12,168   2,010

</TABLE>
<PAGE>


                                  RISK FACTORS

     The securities  offered hereby are speculative and involve a high degree of
risk.  Only those persons able to lose their entire  investment  should purchase
these securities. Prospective investors, prior to making an investment decision,
should  carefully read this  prospectus  and consider,  along with other matters
referred to herein, the following risk factors:

     1. Need for  Additional  Funds.  Based on current  levels of operations and
commitments, the Company anticipates that it will need to generate positive cash
flows from  operations  in order to decrease its  dependency  on cash flows from
financing  activities.  Adequate  funds for the  Company's  businesses  on terms
favorable to the Company,  whether through  additional  equity  financing,  debt
financing or other  sources,  may not be available when needed and may result in
significant dilution to existing stockholders.  Further, the Company has no bank
or other credit facility or other readily available access to debt financing. If
the Company is unable to secure additional funding when required,  it would most
likely  decrease or eliminate  certain  current or expansion  activities or sell
certain of its operations.  Ultimately, its inability to obtain sufficient funds
from operations or external  sources would have a material adverse effect on its
financial condition and viability.

     2. Lack of  Profitable  Operations  and Cash Flow from  Operations;  Future
Profitability Uncertain. The Company first acquired operating assets in April of
1989.  It has  incurred  net  losses  of  approximately  $12,207,000  for  1994,
$18,365,000  for 1995, and $18,953,000 for the year ended December 31, 1996, and
$12,999,000 for the nine months ended September 30, 1997, and cumulative  losses
of $82,355,000  through  September 30, 1997, and may incur additional  losses in
the course of building its business.  The profitability of the Company under its
current   business  plan  is   substantially   dependent   upon  the  successful
exploitation of its d.b.Express technology.  There can be no assurances that the
Company will be able to successfully exploit the d.b.Express technology, and the
Company  received a "going concern" opinion in its 1996  Consolidated  Financial
Statements.

     3.  Limited  Operating  History.   The  Company  acquired  or  started  its
businesses in 1989.  Effective  October 1990, it acquired Ramp Associates,  Inc.
and  effective  September  1993,  it  acquired  Softworks,  Inc.,  both of which
operated as private self-sufficient  companies prior to their acquisition by the
Company.  The Company  eliminated the Ramp  Associates,  Inc. line of consulting
services effective December 1993. The Company purchased the "Superbase" database
software technology in June 1994 and acquired DBopen Inc., and MapLinx,  Inc. in
December 1994.  Subsequent to these acquisitions,  as a result of limited sales,
changing market conditions and management's  decision to focus its activities on
exploitation of d.b.Express and Softworks, management has determined to sell the
"Superbase" technology assets (sold in the second quarter of 1996),  discontinue
the DBopen related products and sold the net assets of MapLinx in 1997. Although
the  Company  has  taken  the  steps  it  believes  are   necessary  to  exploit
d.b.Express,  there  can be no  assurance  that the  Company's  efforts  will be
successful in this regard. To date, revenues generated from d.b.Express products
have been insignificant.

     The Company's  products have generated revenues of $19,931,000 for the nine
months ended  September 30, 1997, and  $19,030,000,  $16,302,000 and $13,695,000
for the years ended December 31, 1996, 1995 and 1994, respectively.

     4. Potential  Adverse Impact on Market Price of Shares  Eligible for Future
Sale.  The  Company  has  approximately   133,629,276  shares  of  Common  Stock
outstanding  as of January 16,  1998,  of which  approximately  109,000,000  are
currently without restriction on resale, an additional 9,589,869, 11,754,530 and
11,855,155  shares and shares  issuable  upon  exercise of options were recently

<PAGE>

registered on Forms S-1/A,  S-1 and S-8,  respectively in addition to the shares
being  registered  herein.  The influx of all of this Common Stock on the market
together with the 11,747,318 shares registered hereunder (11,327,318 outstanding
shares and 420,000 shares issuable upon exercise of options or warrants included
herein) , could have a significant  adverse effect on the market for, as well as
the price of,  the  Common  Stock.  If all  outstanding  options  and  warrants,
including options subject to various performance  requirements,  were exercised,
the  outstanding  shares would total  146,793,505  shares.  Included  within the
shares recently  registered and those being registered  herein are approximately
8,300,000  contingent  shares which may become issuable as a result of guarantee
obligations.  These  contingent  issuances  could  also  result  in the  need to
increase the number of shares  available  for issuance  through a reverse  stock
split or an increase  in the  authorized  capital,  both of which  actions  were
approved by the shareholders at the November 26, 1997,  shareholders' meeting. A
decline in the market price also may make the terms of future  financings  which
involve  the  Company's  Common  Stock  or the  use  of  convertible  debt  more
burdensome.  Although the  exercise of the options  being  registered  hereunder
would result in significant proceeds to the Company  (approximately  $10,400,000
if all outstanding  warrants and options are earned and are exercised for cash),
the impact of any  significant  number of such shares  entering the market would
likely  have a negative  impact on the  market  price for the  Company's  Common
Stock.  The Company  increased its  authorized  number of shares of common stock
from  60,000,000 to  150,000,000 on March 22, 1996, and received on November 26,
1997,authorization  from the shareholders to increase the authorized  capital to
300,000,000  shares of Common Stock and/or to effect a reverse  stock split in a
ratio of from 1 for 2 to 1 for 10 in the  Board of  Directors'  discretion.  The
Company does not currently plan to act on either authorization,  however,  there
is no  assurance  that  either,  both or neither of the  authorizations  will be
effected.

     5. Competition. The Company's products are marketed in a highly competitive
environment  characterized by rapid change,  frequent product  introductions and
declining prices.  Further,  the Company's  personal computer products have been
designed  specifically  for use on the Intel x86 family of computers,  utilizing
other  well  known  database  products.  A  decline  in the use of this  type of
personal  computer or the emergence of competitive  platforms  could  materially
adversely affect the market for the Company's  products.  The Company  considers
certain  end-user data access tool and  executive  information  system  software
companies  to be  competitors  of its  d.b.Express  product,  including  Trinzic
Corporation,  Cognos,  Inc., Comshare Corp., and Pilot Software,  Inc. While the
Company  believes  that  d.b.Express  can  compete   effectively   against  such
companies'  product  offerings based on ease of use, lack of  programming,  data
access,  speed and price,  no assurance can be given in this regard.  Certain of
Softworks' products compete with products from Boole & Babbage, Legent Corp. and
BMC, and while the Company believes that Softworks' products compete effectively
based on quality of product,  support and price,  no assurances  can be given in
this regard.  Many of the Company's existing and potential  competitors  possess
substantially  greater  financial,  marketing and technology  resources than the
Company.

     6.  Current  Litigation.  The  Company  and  certain  of its  officers  and
directors are parties to several lawsuits including one class action claim which
has been settled but is still waiting for final adjudication.  While the Company
intends to vigorously defend these actions, any substantial judgment against the
Company  would have a material  adverse  effect on its  financial  condition and
threaten the Company's viability.  The Company also settled a prior
class action claim in 1996. See "Business - Legal Proceedings."

     7. Seasonality. The Company's quarterly results are subject to fluctuations
from a wide  variety of  factors  including,  but not  limited  to, new  product
introductions,   domestic  and  international   economic  conditions,   customer
budgetary  considerations,  the timing of product  upgrades and customer support
agreement  renewal cycles. As a result of the foregoing  factors,  the Company's
operating results for any quarter are not necessarily  indicative of results for
any future period.

     8.  Dependence  on Key  Personnel.  The Company is highly  dependent on its
executive officers and management personnel,  the loss of any of whom could have
an  adverse  affect  upon its  operations.  While  the  Company  has  employment
agreements with several management persons, it has no employment agreements with
its  principal  executive  officers.  Should any of the members of the Company's

<PAGE>

senior  management  be unable or unwilling to continue in their present roles or
should such person  determine to enter into  competition  with the Company,  the
Company's prospects could be adversely  affected.  The Company's success is also
dependent  upon its  ability  to  attract,  retain and  motivate  highly-trained
technical,  marketing, sales and management personnel. The inability to attract,
retain  and  motivate  personnel  required  for  development,   maintenance  and
expansion of the Company's  activities  could adversely  affect its business and
prospects.

     9. Substantial  Number of Outstanding Shares of Common Stock and Volatility
in Trading Price.  The Company has  approximately  133,629,276  shares of Common
Stock outstanding as of January 16, 1998 approximately 109,000,000 are currently
without  restriction  on  resale,  an  additional   9,589,869,   11,754,530  and
11,855,155  shares and shares  issuable  upon  exercise of options were recently
registered on Forms S-1/A,  S-1 and S-8,  respectively in addition to the shares
being  registered  herein.  Certain  of these  shares  were  issued  in  private
transactions for which the Company issued price guarantees. Although the Company
has no immediate  acquisition plans,  potential future acquisitions could result
in the issuance of substantial  additional  shares of Common Stock. The price of
the  Company's  Common Stock is subject to  fluctuation  and has  increased  and
decreased  substantially during 1995, 1996 and 1997. The trading activity in the
Company's Common Stock also varies from time to time so that, at any given time,
the sale of a large block could adversely  affect the market price of its Common
Stock.

     10. Risk of Rapid Growth and Business Expansion.  The Company is pursuing a
rapid growth  strategy  that has involved and is expected to continue to involve
significant  growth  over at  least  the next  twelve  months.  There  can be no
assurance  that the  Company  will  successfully  achieve  its  planned  growth.
Accomplishing its objectives will depend upon a number of factors, including the
Company's   ability  to  develop  products   internally  with  emphasis  on  the
exploitation  of its  d.b.Express  product.  In addition,  the Company may incur
development,  acquisition or expansion costs that represent a higher  percentage
of total revenues than larger or more established companies, which may adversely
affect the Company's results of operations.

     11. No Credit Facility. The Company has no credit facility and has no other
significant  assets other than account  receivables  which would be available to
collateralize any future borrowings.  Accordingly,  the Company's business could
be  adversely  affected  in the event  that it has a need for  funds in  amounts
greater  than its cash on hand,  which it is unable to  obtain  through  debt or
equity financing.

     12. No  Dividends.  The  Company  has not  declared  or paid,  and does not
anticipate  declaring or paying in the foreseeable future, any cash dividends on
its Common  Stock.  The Company's  ability to pay  dividends is dependent  upon,
among other things,  future earnings,  the operating and financial  condition of
the Company,  its capital  requirements,  general business  conditions and other
pertinent  factors,  and is subject to the discretion of the Board of Directors.
Accordingly,  there is no assurance  that any dividends will ever be paid on the
Company's Common Stock.

     13. Importance of and Risks Relating to Intellectual  Property Rights.  The
computer  software  industry is  characterized  by extensive use of intellectual
property  protected by copyright,  patent and trademark laws.  While the Company
believes that it does not infringe on the  intellectual  property  rights of any
third  parties  in  the  conduct  of  its  business,  allegations  of  any  such
infringement, or disputes or litigations relating thereto, could have a material
adverse affect on the Company's business and financial condition. Also, if third
parties were to be permitted to use the Company's proprietary technology without
the Company's  consent or without the Company being  compensated  therefor,  the
Company  believes that one of its  competitive  advantages  could be eroded.  No
assurance  can  be  given  that  the  Company's   patents  and  copyrights  will
effectively  protect the Company from any copying or emulation of the  Company's
products in the future.

     14.  Lack of  Managing  Underwriter.  The sale of the  Common  Stock of the
Selling  Stockholders  will  not be  coordinated  or  controlled  by a  managing
underwriter.  Certain Selling Stockholders may be deemed to be underwriters,  as

<PAGE>

such term is defined by the Securities Act. Selling  Stockholders  will,  during
the distribution  period, also be subject to the restrictions on their purchases
and sales of  Common  Stock as set  forth in Rules  10b-6  and  10b-7  under the
Exchange Act. See "Selling Security holders" and "Plan of Distribution."

     15.  Potential  Impact  If Rule 15G  Becomes  Applicable  to the  Company's
Securities. Rule 15G of the Securities Act of 1934 provides certain requirements
for the sale of  securities  which  are  classified  as "penny  stocks."  As the
Company exceeds the asset and revenue  parameters for  classification as a penny
stock  (less than $2 million of tangible  assets or $6 million of  revenues  for
companies in business  more than three years) and trades on the NASDAQ  exchange
(Small Cap Market)  those rules are not  currently  applicable  to the  Company.
However,  in the event, the Company were to be so classified in the future,  the
compliance  requirements  for the sale of securities under Rule 15G could have a
negative effect on the marketability of the Company's securities.

     16.  Potential Loss of Entire  Investment in the Company's  Securities.  An
investment  in the  securities  of the  Company  involves a high degree of risk,
including the potential total loss of the investment.

                                 USE OF PROCEEDS

     The Company will not receive any proceeds from this offering, except to the
extent  options  or  warrants  are  exercised  for cash to  purchase  any of the
420,000  shares  covered  by  this  Prospectus  underlying  stock  options  or
warrants. The net proceeds to the Company, if all outstanding options (including
options not covered by this  Prospectus)  are exercised,  will be  approximately
$10,400,000.  Substantially  all of such  funds,  if  any,  are  intended  to be
utilized  to further  exploit  the  Company's  products,  including  the working
capital and general overhead expenses associated therewith.

                           PRICE RANGE OF COMMON STOCK

     The Company's  Common Stock is traded on NASDAQ under the symbol CCEE.  The
following  table sets forth the high and low sales prices of the Common Stock as
reported on NASDAQ for the fiscal periods indicated. See "Dividend Policy".
<TABLE>
<CAPTION>
                                                                    Common Stock
                                                                  High         Low
      1994
      ----
<S>                                                            <C>             <C>  
       First Quarter . . . . . . . . . . . . .                   5 3/8          2 1/2
       Second Quarter. . . . . . . . . . . . .                 2 15/16          1 1/8
       Third Quarter . . . . . . . . . . . . .                   1 5/8          15/16
       Fourth Quarter. . . . . . . . . . . . .                  1 5/16            5/8

      1995
      ----
       First Quarter . . . . . . . . . . . . .                  1 1/32           7/16
       Second Quarter. . . . . . . . . . . . .                 4 31/32            1/4
       Third Quarter . . . . . . . . . . . . .                       2          1 3/8
       Fourth Quarter. . . . . . . . . . . . .                   3 1/2         1 9/32

      1996
      ----
       First Quarter . . . . . . . . . . . . .                 2 27/32        1 23/32
       Second Quarter  . . . . . . . . . . . .                  2 1/16             1
       Third Quarter . . . . . . . . . . . . .                  1 5/16         17/32
       Fourth Quarter. . . . . . . . . . . . .                   25/32           5/16

<PAGE>

      1997
      ----
       First Quarter . . . . . . . . . . . . .                  1 1/32          19/32
       Second Quarter  . . . . . . . . . . . .                   23/32            1/2
       Third Quarter . . . . . . . . . . . . .                   51/64            3/8
       Fourth Quarter  . . . . . . . . . . . .                   29/32          15/32

      1998
      ----
       First Quarter  (to January 16, 1998). .                    9/16          13/32

</TABLE>

       As of October 3, 1997, the total number of  shareholders of the Company's
Common Stock was approximately  20,200, with 1,700 holders of record,  exclusive
of  shareholders  whose  shares  are held in the name of their  brokers or stock
depositories   which  are  estimated  to  be  approximately   18,500  additional
shareholders.

                                 DIVIDEND POLICY

     Holders of the  Company's  common stock are entitled to dividends  when, as
and if  declared  by the  Board  of  Directors  out of funds  legally  available
therefor.  The Company does not  anticipate  the  declaration  or payment of any
dividends in the foreseeable future. The Company intends to retain earnings,  if
any, to finance the development  and expansion of its business.  Future dividend
policy will be subject to the  discretion  of the Board of Directors and will be
contingent  upon future  earnings,  if any, the Company's  financial  condition,
capital requirements,  general business conditions and other factors. Therefore,
there can be no assurance that any dividends of any kind will ever be paid.

                                 CAPITALIZATION

     The  following  table  sets  forth the  capitalization  of the  Company  at
September 30, 1997:

<TABLE>

<S>                                                     <C>     
     Current Portion of Long-Term Debt. . . .              $453,000
     Long-term debt . . . . . . . . . . . . .               280,000

       Stockholders' Equity:

       Common Stock, $.0001 par value; 150,000,000
       shares authorized; 125,535,000 shares issued
       and outstanding . . . . . . . . . . . . . . .         13,000

       Additional paid-in capital. . . . . . . . . .     90,839,000
       Accumulated Deficit . . . . . . . . . . . . .    (82,355,000)

    Total Stockholders' Equity . . . . . . . . . .        8,497,000

    Total Capitalization . . . . . . . . . . . . . .      8,777,000
</TABLE>

     As of January 16, 1998, 133,629,276 shares are outstanding, and options and
warrants are outstanding for an aggregate 13,164,229 additional shares including
all shares authorized for issuance under the various stock incentive plans.

<PAGE>


                                      * * *
                             SELECTED FINANCIAL DATA
                      (in thousands, except per share data)

     The selected  financial  data as of December 31, 1996 and 1995 and for each
of the three years in the period ended  December  31,1996 , has been  abstracted
from the audited financial  statements of the Company included elsewhere herein;
the selected  financial data as of December 31, 1994, 1993 and 1992 and for each
of the two years in the period ended December 31, 1993, has been abstracted from
audited financial  statements of the Company not presented herein.  The selected
financial  data as of  September  30,  1997,  and 1996,  and for the nine  month
periods  then  ended,  are  derived  from  the  Company's   unaudited  financial
statements,  and, in the opinion of  management  have been  prepared on the same
basis as the Company's audited consolidated financial statements and include all
adjustments,  consisting  of  normal  recurring  items,  necessary  for  a  fair
presentation  of such interim  financial data. The results of operations for the
interim  periods  presented  are  not  necessarily   indicative  of  results  of
operations  that may be expected  for the year ending  December  31,  1997.  The
selected  financial  data  should be read in  conjunction  with  such  financial
statements  and  related  notes  included   elsewhere  in  this  Prospectus  and
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations."  All share and per share  data has been  adjusted  to  reflect  the
one-for-four stock split approved by the Company's shareholders on September 22,
1992.

        Summary Consolidated Statement of Operations Data
<TABLE>
<CAPTION>
                                     Nine Months Ended
                                September 30,           Year Ended December 31,
                                -------------           -----------------------   
                               (in thousands, except per share data)

                                1997      1996      1996      1995      1994      1993      1992
                                ----      ----      ----      ----      ----      ----      ----
<S>                            <C>       <C>       <C>       <C>       <C>       <C>      <C>    
Revenues                       $19,931   $12,144   $19,030   $16,302   $13,695   $3,360   $    97
                               -------   -------   -------   -------   -------   -------  -------
Total costs and expenses        32,455    21,418    35,173    34,667    25,474   16,699     5,074
                               -------   -------   -------   -------   -------   -------  -------
Operating loss                $(12,524)  $(9,274)  (16,143)  (18,365)  (11,779) (13,339)  (4,977)
Other income (expense)            (475)   (2,810)   (2,810)     -         (428)    (111)       1
                               -------   -------   -------   -------   -------   -------  -------
Net loss                      $(12,999) $(12,084) $(18,953) $(18,365) $(12,207)$(13,450) $(4,976)
                               =======   =======   =======   =======   =======   =======  =======

Net loss per share               $(.12)    $(.18)   $(0.27)   $(0.37)   $(0.51)  $(0.86)  $(0.40)
                               =======   =======   =======   =======   =======   =======  =======

Weighted average common 
shares outstanding             106,897    66,052    71,301    49,211    24,110   15,721   12,332
                               =======   =======   =======   =======   =======   =======  =======
</TABLE>

       Summary Consolidated Balance Sheet Data
<TABLE>
<CAPTION>
                                At September 30,         At December 31,
                                ----------------         ---------------
                                 (In thousands)

                               1997     1996     1996      1995      1994      1993     1992    
                               ----     ----     ----      ----      ----      ----     ----
<S>                           <C>      <C>      <C>      <C>        <C>       <C>      <C>   
Working capital (deficit)     $1,334   $3,694   $2,809   $(2,998)   $(3,590)  $2,545   $(610)
Total assets                  33,737   25,265   27,671    16,081     21,609   20,607   4,044
Long term debt                   280    2,695      526       800        695      172     163
Long term debt - current 
portion                          453      381      458       359        119       53      26
Common stock subject to 
redemption                        -        -                4000       4000       -       -
Shareholders' equity           8,497    6,385     9524      2009       7839    12168    2010
</TABLE>

<PAGE>





                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     The following  discussion should be read in conjunction with the historical
financial statements of the Company included elsewhere in this Prospectus.

Results of Operations
---------------------

For the Three and Nine Months Ended September 30, 1997, and 1996
----------------------------------------------------------------

Business Description
--------------------

     Computer Concepts Corp. and subsidiaries (the "Company")  design,  develop,
market and support  information  delivery software products,  including end-user
data access tools for use in personal  computer and  client/server  environments
and systems management  software products for corporate  mainframe data centers.
The Company has  recently  entered  into the  Information  Services / technology
infrastructure  service business.  The Company's  principal market is the United
States.  Overseas revenues are principally  generated from European subsidiaries
and distributors.

     The Company  currently  consists of three operating units or product lines:
d.b.Express,  Softworks,  and a newly formed business unit. d.b.Express provides
businesses  with  a  simple,  fast,  low-cost  method  of  finding,  organizing,
analyzing and using information  contained in databases through a visually-based
proprietary  software tool.  Softworks,  provides  systems  management  software
products  that  optimize   mainframe   system   performance,   reduce   hardware
expenditures,   and  enhance  the  reliability  and  availability  of  the  data
processing environment.  Products marketed by Softworks include technology which
addresses  the year 2000  problem.  During the nine months ended  September  30,
1997, the Company commenced  operations of a new business unit which is designed
to provide a wide array of  information  technology,  support and services.  The
Company has employed an individual,  formerly with I.B.M.,  having  expertise in
this field and intends to capitalize on his  experience  and competency in order
to create a unique,  single  management  infrastructure  to support an extensive
selection of services and vendors.  The  Company's  new business line will offer
solutions,  support,  and  strategies to solve various  business  crises in such
areas as: network determinations,  help desk applications,  wiring/cabling,  LAN
connections,  moves/adds/changes,  and  project  management.  Additionally,  the
Company will oversee new  installations  as well as offering  on-site  component
repair.  The method of revenue  recognition  will be dependent upon the type and
manner of service provided.

Results of Operations
---------------------

Three and Nine Months Ended September 30, 1997 Compared with September 30, 1996
-------------------------------------------------------------------------------

     Revenues for the quarter ended  September  30, 1997,  were  $6,657,000,  an
increase of $2,344,000  over revenues for the quarter ended  September 30, 1996,
while for the nine months ended September 30, 1997, and 1996, revenues increased
$7,787,000 from $12,144,000 to $19,931,000.  For the quarter ended September 30,
1997, revenues increased at Softworks by $2,816,000, while decreases in revenues
of $472,000  resulted  primarily  from the closure of certain  subsidiaries  and
product lines.  Year to date increases of $7,138,000 and $1,432,000 at Softworks
and Computer  Concepts  respectively,  were offset by decreases of $783,000 from
the closure of certain  subsidiaries and product lines. The increase in revenues
at Softworks is due primarily to the release of new products and expanded sales

<PAGE>

and marketing  efforts.  The increase at Computer Concepts is principally due to
the revenues generated from its new special services division.

     The cost of revenues and technical support increased $471,000 to $1,825,000
for the quarter ended  September  30, 1997,  as compared to  $1,354,000  for the
prior year quarter and by  $3,075,000  to  $7,046,000  for the nine months ended
September 30, 1997,  from  $3,971,000 for the prior year nine month period.  The
principal  factors for these increases  include the release of new product lines
and added  technical  support for ten  additional  sales offices at Softworks as
well as the costs associated with the new special services  division at Computer
Concepts.

     Research and  development  costs  increased  $926,000 to $1,254,000 for the
quarter ended  September 30, 1997 from $328,000 for the prior year quarter,  and
increased $1,901,000 to $2,905,000 for the nine months ended September 30, 1997,
from  $1,004,000  for the prior  year nine month  period.  R&D  activities  were
devoted  to  further  develop  current  product  technologies,  as  well  as the
development of technologies pertaining to the Year 2000 problem.

     Sales and marketing  expenses  increased  approximately  $3,205,000 for the
quarter ended  September 30, 1997, to $5,744,000  from  $2,539,000 for the prior
year.  This  increase is primarily  due to Softworks'  domestic  expansion,  the
creation of additional international  subsidiaries and its efforts to market and
promote Year 2000  technologies.  Additional  expenses incurred were a result of
increased  efforts  to  market  d.b.Express  For the  nine  month  period  ended
September 30, 1997,  expenses  increased  when compared to the nine months ended
September 30, 1996 by $5,908,000, primarily due to factors mentioned above.

     General and  administrative  costs increased $792,000 to $2,413,000 for the
three months ended  September  30, 1997,  when  compared to  $1,621,000  for the
quarter ended  September 30, 1996,  and by $2,004,000 to $7,119,000 for the nine
months ended  September  30,1997 from $5,115,000 for the nine month period ended
September 30, 1996. The principal  factors  contributing  to these increases has
been the additional  overhead  costs  associated  with the increased  efforts to
market d.b.Express and technologies associated with the Year 2000 problem, along
with  non-cash  compensation  awards  made to certain  officers,  employees  and
consultants.

     See  Note  3  to  the  condensed   consolidated  financial  statements  for
discussion  relating to the non-cash  interest charge pertaining to the discount
on convertible debentures.

     See  Note  5  to  the  condensed   consolidated  financial  statements  for
discussion relating to the unusual charges incurred during the nine months ended
September 30, 1997. For the quarter ended March 31, 1996,  the Company  recorded
an unusual  charge to earnings of  $2,075,000  as a result of a settlement  of a
class action suit.

Financial Condition and Liquidity
---------------------------------

     The Company has  incurred  consolidated  net losses of  $4,780,000  for the
three months ended  September  30, 1997,  $12,999,000  for the nine months ended
September 30, 1997, and cumulative net losses of $82,355,000  through  September
30,  1997.  Further,  the  Company  has  incurred  consolidated  net  losses  of
$18,953,000,  $18,365,000  and  $12,207,000  during the years ended December 31,
1996,  1995, and 1994,  respectively.  For the nine month period ended September
30, 1997, net cash used in operating  activities was $5,872,000,  reflecting the
above net loss being offset by various  non-cash items and changes in assets and
liabilities described in the accompanying  condensed  consolidated  statement of
cash flows.  The Company's cash  requirements  were primarily  financed  through
current and prior year sales of  convertible  debentures,  sales of common stock
and funds generated from Softworks' operations.
<PAGE>

     The  Company  does not  maintain  a  credit  facility  with  any  financial
institution.  The Company  has  continued  to incur  significant  expenses  with
respect to the development and marketing of its d.b.Express  product  technology
without generating any significant  revenues. As a result of continued operating
losses,  the use of  significant  cash in operations  and the lack of sufficient
funds to execute its business plan,  among other  matters,  there is substantial
doubt about the Company's ability to continue as a going concern. No adjustments
have been made with respect to the condensed  consolidated  financial statements
to record the results of the ultimate outcome of this uncertainty.

     Management's  plans to remain a going concern,  as more fully  described in
these notes,  require  additional  financing  until such time as sufficient cash
flows are generated from operations.  During the nine months ended September 30,
1997, the Company received  approximately  $3,865,000 (less commissions and fees
of $484,000)  from the sale of  convertible  debentures,  and  $3,000,000  (less
commissions  and fees of $240,000) from the sale of common stock.  See Note 3.a.
to the condensed  consolidated  financial statements.  The Company also received
$2,140,000 (less  commissions and fees of approximately  $160,000) from the sale
of common stock in January, 1998.

     There  can be no  assurances  that  the  Company  will be  able  to  obtain
sufficient  financing to execute its business plan. The Company's primary source
of revenue continues to be derived from its Softworks  subsidiary.  Management's
plans to remain a going  concern rely upon  achieving  positive  cash flows from
operations  through  the  continued  growth  of  Softworks  and  the  successful
exploitation of the Company's d.b.Express product.  While to date, revenues from
d.b.Express have been  insignificant,  management  believes that its proprietary
software  technology  has  significant  potential in several  areas,  and solves
certain  significant  business  issues in the  telecommunications  and  internet
related markets.  In order to realize the potential of this product,  management
will need to  aggressively  pursue all  marketing  opportunities.  To date,  the
Company  has  incurred  significant  losses  (both cash  expenses  and  non-cash
expenses) as a result of the development and marketing of d.b.Express. There can
be no assurances that the Company will be successful in achieving  positive cash
flows from  operations  with  respect to the  d.b.Express  product.  The Company
continues to pursue license and development  agreements with various  companies.
While none of the Company's  existing  agreements or development  opportunities,
that relate to d.b.Express, provide sales commitments,  (excepting therefrom the
recent  agreement with a major  telecommunicatons  company which provides for in
excess of $700,000 and revenue sharing thereafter), management believes that the
successful exploitation of its d.b.Express technology,  as well as the continued
growth of Softworks, will eventually enable the Company to achieve positive cash
flows from operations.  Unless the Company determines to discontinue its pursuit
of d.b.Express revenues (which requires significant  financial  resources),  the
Company will need to generate  positive cash flows from operations from the sale
of  d.b.Express  product in order to decrease its  dependency on cash flows from
financing  activities  and remain a going  concern.  At November 10,  1997,  the
Company had cash and cash equivalents of approximately  $1,674,000.  Ultimately,
however,  positive  cash flows from  operations  will be  necessary  in order to
curtail the Company's reliance on equity placements.

     In  connection  with the 1993  acquisition  of  Softworks,  the  Company is
required to make additional  payments to two of Softworks' former  shareholders,
based upon certain  product  revenues for the years 1995 through  1998,  up to a
maximum of $1,000,000  each,  for an aggregate  maximum of  $2,000,000.  Through
September  30,  1997,  the  Company  has  incurred  an  aggregate  liability  of
$1,409,000,  (of which  $1,289,000  has been  paid) to the  non-employee  former
shareholders,  which has been treated as additional  consideration in connection
with the acquisition, and, accordingly,  included in the excess of cost over the
fair value of net assets acquired,  as these individuals did not continue in the
employment of the Company  subsequent to the  acquisition.  No other  contingent
payments have been made under the terms of this agreement.
<PAGE>

     In July,  1997,  the Company  completed a transaction  in which it sold all
rights to the underlying software  technologies of its Maplinx, Inc. subsidiary.
Further,  as part of the  transaction,  the  purchaser  acquired all of Maplinx'
current  assets  and  assumed  all  of  its  liabilities.  The  sales  price  of
approximately  $850,000 was adjusted (reduced) by the excess of Maplinx' current
liabilities  over current assets  (approximately  $380,000),  resulting in a net
sales price of $470,000. Approximately $235,000 was paid at closing, the balance
of $235,000 plus  interest is due six months from  closing.  As a result of this
transaction, the Company recognized a gain on the sale of net assets of $813,000
in the quarter ended September 30, 1997.

     The Company is a defendant in several  lawsuits and class action  claims as
described in Note 5.c. Based on consultation with legal counsel, the Company and
its officers believe that meritorious  defenses exist regarding the lawsuits and
claims, and they are vigorously  defending against the allegations.  The Company
is unable to predict  the  ultimate  outcome of the  claims,  which could have a
material  adverse effect on the consolidated  financial  position and results of
operations of the Company.  Accordingly,  except as expressly  discussed herein,
the financial  statements do not reflect any adjustments  that might result from
the ultimate outcome of these litigation matters.

     Softworks  sells  perpetual  and  fixed  term  licenses  for its  mainframe
products,  for  which  extended  payment  terms of three  to five  years  may be
offered.  In the case of  extended  payment  term  agreements,  the  customer is
contractually  bound to equal  annual  fixed  payments.  The first  year of post
contract customer support (PCS) is bundled with standard license agreements.  In
the case of extended payment term  agreements,  PCS is bundled for the length of
the payment term. Thereafter,  in both instances,  the customer may purchase PCS
annually. At September 30, 1997, the amount of such future receivables extending
beyond one year was  approximately  $6,980,000,  and is included in  installment
accounts receivable, due after one year and deferred revenues.

For the Years Ended December 31, 1996, 1995 and 1994
----------------------------------------------------

Financial Condition and Liquidity
---------------------------------

     The  Company  has  incurred   consolidated   net  losses  of   $18,953,000,
$18,365,000 and  $12,207,000  during the years ended December 31, 1996, 1995 and
1994,  respectively,  and cumulative net losses of $69,356,000  through December
31, 1996. As of December 31, 1996,  the Company's  current  assets  exceeded its
current  liabilities  by  $2,809,000.  For the year ended December 31, 1996, net
cash used in operating  activities  was  $4,994,000.  Net cash used in operating
activities for 1996 was less than the Company's  total net loss primarily due to
non-cash  expenses  including  common  stock and options  issued for services of
$3,446,000,  common  stock  issued  subject  to  forfeiture  of  $1,508,000  and
amortization and
depreciation of $3,684,000.  In addition, as more fully described in Note 7, the
Company recorded a non-cash  interest charge  associated with certain  financing
activities  of  $2,810,000  and, as  described  in Note 11,  recorded a non-cash
unusual charge of $2,000,000  related to the  settlement of certain  litigation.
Cash  was  also  used  for  certain  investing   activities   including  capital
expenditures of $832,000 and the purchase of software  technologies of $526,000.
These  uses of cash  were  primarily  financed  through  the  sales  convertible
debentures,   common  stock  and  exercises  of  stock   options   approximating
$11,928,000, net of commissions.

Management's Plan to Continue as a Going Concern
------------------------------------------------

     Although  the  Company's  liquidity  position at  December  31,  1996,  was
adversely  affected by the Company's  continuing  losses,  the equity placements
during the year then ended have enabled the Company to continue  operating.  The

<PAGE>

Company  does not maintain a credit  facility  with any  financial  institution.
Management's  plans to remain a going concern,  as more fully  described  below,
require additional financing. This financing is anticipated to be in the form of
equity and convertible debenture investments, however there can be no assurances
that the  Company  will be able to obtain  sufficient  financing  to execute its
plan. As a result of the continuing operating losses, and the lack of sufficient
funds to  execute  its  business  plan,  there is  substantial  doubt  about the
Company's ability to continue as a going concern.  No adjustments have been made
with respect to the consolidated  financial  statements to record the results of
the ultimate outcome of this uncertainty.

     Management's  plans to remain a going concern rely upon achieving  positive
cash flows from  operations  through the  continued  growth of Softworks and the
successful exploitation of the Company's d.b.Express  technology.  The Company's
primary source of revenue continues to be derived from its Softworks subsidiary.
While to date,  revenues from  d.b.Express have been  insignificant,  management
believes that its proprietary  software technology has significant  potential in
several  areas,   and  solves  certain   significant   business  issues  in  the
telecommunications  and  Internet  related  markets.  In  order to  realize  the
potential  of this  product,  management  will need to  aggressively  pursue all
marketing  opportunities.  To date, the Company has incurred  significant losses
(both cash  expenses  and  non-cash  expenses as  described  in the Notes to the
Consolidated  Financial Statements) as a result of the development and marketing
of  d.b.Express.  The  Company  continues  to  pursue  license  and  development
agreements  with  various  companies.  While  none  of  the  Company's  existing
agreements or development  opportunities  provide sales commitments,  (excepting
therefrom  the recent  agreement  with a major  telecommunicatons  company which
provides for in excess of $700,000 and revenue sharing  thereafter),  management
believes that the successful  exploitation  of its  d.b.Express  technology will
eventually  enable the Company to achieve  positive cash flows from  operations.
There can be no  assurances  that the Company  will be  successful  in achieving
positive cash flows from  operations  with respect to the  d.b.Express  product.
Unless the Company determines to discontinue its pursuit of d.b.Express revenues
(which  requires  significant  financial  resources),  the Company  will need to
generate  positive  cash  flows  from  operations  from the sale of  d.b.Express
product  in order to  decrease  its  dependency  on cash  flows  from  financing
activities and remain a going concern.

     Growth of the Company's Softworks subsidiary is anticipated to continue for
its existing product line, as well as from its new Year 2000 and  multi-platform
products,  and the  Company  anticipates  that  during  the first  half of 1997,
Softworks will release its first multi-platform systems management products with
a suite of products under the name  CenterStage/MP  which are being developed to
resolve storage issues  regardless of platform,  and to expand Softworks' market
beyond the  mainframe  segment.  The Company  believes  Softworks'  products are
positioned to meet the market demand for systems management software.

     The software  products being  developed for the Year 2000 simplify the Year
2000 conversion  process by providing tools to help with the critical  processes
of  identifying,  diagnosing and  simulating  millennium  issues  throughout the
mainframe  environment.  Management  believes  this  product line will result in
additional cash flows which will help to defray the Company's consolidated costs
of operations;  however, there can be no assurances as to the volume of revenues
which will be generated from this product line.

     Management  believes  that the  successful  exploitation  of the  Company's
d.b.Express  technology,  the continuing success of the Softworks'  subsidiary's
existing   product  line  and  the  launching  of   Softworks'   Year  2000  and
multi-platform  technologies,  among other things,  should enable the Company to
eventually achieve positive cash flows from operations. The long-term success of

<PAGE>

the Company,  under its existing business plan, is dependent upon the continuing
successful  domestic and  international  growth of Softworks,  and the Company's
ability to generate material d.b.Express revenues. Due to the recent success and
rapid  growth  of the  Company's  Softworks'  subsidiary,  management  no longer
believes  that  the  Company's  future  success  is  solely  dependent  upon the
successful exploitation of the d.b.Express technology.  Entry into the Year 2000
and  multi-platform  markets  through  its  Softworks  subsidiary  and  into the
Internet  market with the Company's new JAVA based Internet  access  technology,
also opens additional markets for potential future sales.

     Softworks  sells  perpetual  and  fixed  term  licenses  for its  mainframe
products,  for  which  extended  payment  terms of three  to five  years  may be
offered.  In the case of  extended  payment  term  agreements,  the  customer is
contractually  bound to equal  annual  fixed  payments.  The first  year of post
contract support (PCS) is bundled with standard license agreements.  In the case
of  extended  payment  term  agreements,  PCS is  bundled  for the length of the
payment  term.  Thereafter,  in both  instances,  the  customer may purchase PCS
annually.  Revenues with respect to such extended payment terms are deferred and
recognized  over the period of the  installment  payment  plan.  At December 31,
1996,  the  amount of such  future  receivables  extending  beyond  one year was
$3,714,000,  and is included in installment accounts  receivable,  due after one
year and deferred revenues in the accompanying  consolidated  balance sheet. All
of the Company's products and internal software are year 2000 compliant, and the
Company does not believe  continuing  compliance  will have a material impact on
the Company.

Impending Changes in Accounting

     There are four impending accounting  pronouncements that potentially impact
the financial accounting and/or reporting of the Company.  Statement of Position
97-2,  "Software  Revenue  Recognition"  ("SOP  97-2"),  Statement  of Financial
Accounting  Standards No. 128,  "Earnings Per Share" ("SFAS 128"),  Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income"" ("SFAS
130"),  and Statement of Financial  Accounting  Standards No. 131,  "Disclosures
About Segments of an Enterprise and Related Information" ("SFAS 131").

     SOP 97-2,  which  was  issued  to  provide  further  guidance  on  applying
generally  accepted  accounting  principles  to software  transactions,  becomes
effective for transactions  entered into beginning in 1998.  Initial adoption of
this  statement  may only be on a  prospective  basis.  The Company is currently
reviewing the impact that adopting this statement  will have on future  reported
operations.

     SFAS 128  establishes  new standards for computing and presenting  earnings
per share which  simplifies the previous  standards and makes them comparable to
international  standards.  This statement becomes  effective  beginning with the
Company's  quarter  ending  December 31, 1997,  and requires  restatement of all
prior-period  earnings per share data.  The Company is currently  reviewing the
impact of adopting this statement.  Since the Company's common stock equivalents
are  antidilutive,  it is not expected that adoption will have a material impact
on the consolidated financial statements.

     SFAS  130,   which   presents   standards  for  reporting  and  display  of
comprehensive  income and its components,  becomes  effective for the Company in
1998 with  reclassifications  made to previous  years  required.  The Company is
currently reviewing the impact that adopting this statement will have on future
financial presentations.  Since the Company does not have material components of
other  comprehensive  income,  it is not  expected  that  adoption  will  have a
material impact on the consolidated financial presentation.

     SFAS 131, which presents standards for determining a reportable segment and
for disclosing  information  regarding each such segment,  becomes effective for
the Company in 1998 with  reclassifications made to previous years required. The
Company is currently reviewing the impact that adopting this statement will have
on future financial  statement  disclosures.  Since the Company believes that it
operates in one industry  segment,  it is not expected that adoption will have a
material impact on the consolidated financial statement disclosures."
<PAGE>

Results of Operations

     Fiscal 1996 Compared to Fiscal 1995

     Revenues for the year ended December 31, 1996 were $19,030,000, an increase
of  $2,728,000 or 17% over the prior years total of  $16,302,000.  This increase
was  primarily  due to the increase in  Softworks'  revenues of  $4,899,000  and
d.b.Express  revenues  of  $180,000,  offset by  reductions  in net  revenues of
MapLinx of $1,560,000 and discontinued subsidiaries of $840,000.

     Cost of revenues and technical support, of $5,944,000 represents a decrease
of  $1,130,000  from the prior year's amount of $7,074,000  due  principally  to
reduced  costs  incurred by MapLinx of $407,000  and by the  discontinuation  of
Superbase and CCEL  operations  of  $1,320,000,  offset by increases  related to
d.b.Express of $681,000.

     During  1996,  sales  and  marketing  expenses  for the  Company  increased
$3,872,000 to $13,038,000  from $9,166,000 for the year ended December 31, 1995.
The increase was due, in part,  to Softworks  efforts in  establishing  overseas
operations of $2,319,000. The remaining portion of the increase was attributable
to d.b.Express.

     General and administrative  expenses decreased $182,000,  to $8,009,000 for
the year ending December 31, 1996 versus $8,191,000 for the year ending December
31, 1995.  The decrease was  principally  due to  discontinued  subsidiaries  of
$1,053,000,  reductions by MapLinx of $50,000,  offset by increases at Softworks
of $723,000 and costs associated with d.b.Express of $384,000.

      Research and development  costs  increased  $226,000 in 1996 to $1,496,000
over the prior year's amount of  $1,270,000,  due  principally to refinements in
d.b.Express technology.
<PAGE>

     See Note 9 to the  Consolidated  Financial  Statements  for a discussion of
unusual charges  incurred for the years ended December 31, 1996, 1995, and 1994,
respectively.

     The reduction in carrying  value of long-lived  assets of $412,000 in 1996,
pertains to the write-down of MapLinx intangible assets.

     Fiscal 1995 Compared to Fiscal 1994

     Revenues  for the year  ended  December  31,  1995,  were  $16,302,000,  an
increase of  $2,607,000 or 19% over the prior years total of  $13,695,000.  This
increase  was  primarily  due to the  acquisition  of  MapLinx  , which  had net
revenues  of  $3,780,000,  as well as an  increase  in  Softworks'  revenues  of
$2,177,000,  offset  by the  loss of  non-recurring  revenues  generated  by the
product  distribution  agreements  related to d.b.Express of $2,964,000 in 1994,
and reductions in net revenues of $313,000 and $305,000 from Superbase and CCEL,
respectively.

     Cost of  revenues  and  technical  support,  of  $7,074,000  represents  an
increase of $1,537,000 over the prior years amount of $5,537,000 due principally
to the MapLinx acquisition which incurred $1,211,000, and increases at Softworks
and CCEL of $1,396,000  and  $130,000,  respectively,  offset by decreases  from
d.b.Express and Superbase of $ 609,000 and $622,000, respectively.

     During  1995,  sales  and  marketing  expenses  for the  Company  increased
$3,316,000 to $9,166,000  from  $5,850,000 for the year ended December 31, 1994.
The  acquisition  of MapLinx  accounted  for  approximately  $2,013,000  of such
increase.  Other  material  components  include  an  increase  at  Softworks  of
$1,364,000  which was due,  in part,  to  Softworks  efforts to bring the DBopen
products to market, as well as establishing overseas operations.

     General and administrative  expenses increased $255,000,  to $8,191,000 for
the year ending December 31, 1995 versus $7,936,000 for the year ending December
31,  1994.  A major  effort  put forth by  management  of the  Company to reduce
Corporate spending resulted in a reduction of $478,000 over the prior year. This
was, however, offset by the acquisition of MapLinx, which was acquired effective
December 31, 1994, and incurred expenses amounting to $733,000 during the year.

     Research and  development  costs  increased  $749,000 in 1995 to $1,270,000
over the prior  years'  amount  of  $521,000,  due  principally  to  DBopen  and
refinements in d.b.Express technology.

     The charge to operations of $3,760,000 for the reduction in carrying values
of long-lived assets includes the write-down of the software asset held for sale
of  $2,440,000  and the  write-off of the DBopen  acquisition  of  approximately
$1,320,000, both of which are described in Note 3 Acquisitions,  of Notes to the
Consolidated Financial Statements.

Safe Harbor Statement

     Certain   information   contained  in  this  annual  report,   particularly
information  regarding  future  economic  performance  and  finances,  plans and
objectives  of  management,  is  forward-looking.  In  some  cases,  information
regarding  certain  important  factors that could cause actual results to differ
materially  from any such  forward-looking  statement  appear together with such
statement.  The following  factors,  in addition to other  possible  factors not

<PAGE>

listed,  could  affect the  Company's  actual  results and cause such results to
differ  materially from those  expressed in  forward-looking  statements.  These
factors include competition within the computer software industry, which remains
extremely intense, both domestically and internationally,  with many competitors
pursuing price discounting;  changes in economic conditions;  the development of
new  technologies  and/or  changes in operating  systems which could obsolete or
diminish the value of existing  technologies  and  products;  personnel  related
costs; legal claims; risks inherent to rolling out new software and new software
technologies;  the current lack of adequate financial resources to carry out the
Company's  current  business plan in regard to the d.b.Express  technology;  the
potential cash and non-cash costs of raising  additional capital or the possible
failure to raise necessary capital;  changes in accounting principles applicable
to the Company's activities and other factors set forth in the Company's filings
with the Securities and Exchange Commission.


                                    BUSINESS

INTRODUCTION

     The Company was organized under the name Unique Ventures,  Inc. as a "blind
pool"  public  company,  under the laws of the State of  Delaware  on August 27,
1987, and changed its name to Computer Concepts Corp. in 1989. Computer Concepts
Corp. and its subsidiaries  (hereinafter  referred to as "Computer  Concepts" or
the "Company")  operate in the computer  software  industry  segment and design,
develop,  market and support information  delivery software products,  including
end-user   data  access  tools  for   personal   computers   and   client/server
environments,  and develops,  markets and supports systems  management  software
products for corporate mainframe data centers.

     Computer  Concepts has  incurred  consolidated  net losses of  $12,999,000,
$18,953,000,   $18,365,000   and   $12,207,000,   on  revenues  of  $19,931,000,
$19,030,000,  $16,302,000 and $13,695,000 during the nine months ended September
30, 1997,  and the years ended December 31, 1996,  1995 and 1994,  respectively,
and  cumulative  net losses of  $82,355,000  through  September 30, 1997.  These
operating losses have been  essentially  funded through the issuance of Computer
Concepts' common stock. Ultimately, however, positive cash flows from operations
will be  necessary  in order  to  curtail  the  Company  s  reliance  on  equity
placements.  While  there can be no  assurances,  management  believes  that the
successful   implementation   of  cost  saving   measures  and  the   successful
exploitation of the Company s d.b.Express technology, among other things, should
eventually  enable the Company to achieve  positive cash flows from  operations.
Management's  plans  to  remain  a  going  concern  (see  Note  1  of  Notes  to
Consolidated Financial Statements for the year ended December 31, 1996, and Note
2 of Notes to Condensed  Consolidated  Financial  Statements for the Nine Months
ended  September  30,  1997)  require  additional  financing  until such time as
sufficient cash flow from operations are generated.

GENERAL

     From 1989 until  September,  1993,  the  Company was  primarily  engaged in
developing its primary product,  "d.b.Express".  While continuing its efforts to
further  improve  and  market  d.b.Express,  the  Company  in late 1993 began to
implement a structured growth through acquisition plan to increase revenues,  by
developing and acquiring  additional  products for  distribution,  as well as to
penetrate  different  software market segments.  There have been no acquisitions
during  1996  and  1997  and none are  presently  planned,  however,  should  an
opportunity  present  itself  wherein,  in the best interest of the Company,  an
acquisition would be appropriate,  the Company would investigate the acquisition
possibilities. The Company, through its process of evaluating its businesses and
determining  where its strategic  focus and financial and  management  resources
should be directed,  continually  adjusts the value of certain assets to reflect
their net realizable value and management s current operating plan.
<PAGE>

     In October 1990, Computer Concepts acquired RAMP Associates, Inc. ("RAMP"),
a privately owned Delaware  corporation  engaged in general computer  consulting
services.  RAMP was  previously  owned by Russell  Pellicano,  the  inventor  of
d.b.Express,  and  currently an officer and director of the Company.  During the
fourth  quarter of 1993, in connection  with its long-term  strategic  plan, the
Company eliminated its general computer consulting service line, taking a charge
for the write-off of the  unamortized  goodwill  associated with RAMP as well as
the accrual of certain severance costs.

     Effective   September   1993,   the  Company   acquired   Softworks,   Inc.
("Softworks"),  a private  Maryland company founded in 1977, and an acknowledged
leader providing  systems  management  software for mainframe  computer systems.
Softworks currently markets twenty-four software products,  and holds over 2,400
licenses  in over 1,800  customer  installations  worldwide.  The  products  are
installed in  approximately  80 of the Fortune 100 companies  data centers.  See
Note 3 of Notes to Consolidated Financial Statements for the year ended December
31, 1996.

     In connection with the Company s business strategy,  during September 1993,
an agreement was entered into with Computer Concepts Europe,  Ltd. ("CCEL"),  an
exclusive non-affiliated  distributor formed predominantly to market d.b.Express
in one of the  world s largest  software  markets.  CCEL s focus was  promotion,
sales and support of the Company s products in major  European  markets.  During
August 1994, the Company  entered into an agreement to acquire CCEL. As a result
of  management  s  subsequent  decision to focus its  financial  and  management
resources  on  the  exploitation  of  d.b.Express   domestically,   the  Company
significantly curtailed its operations in Europe in order to focus its financial
and management  resources on the attainment of strategic  alliances and software
license agreements with major software companies,  resulting,  in the opinion of
management,  in much greater product revenues than direct selling could produce.
Accordingly, the Company wrote-off the carrying amount of this investment in the
fourth quarter of 1994

     During  June 1994,  the Company  completed  the  purchase of the  Superbase
technology  and certain  related  assets from Software  Publishing  Corporation.
Superbase is a database programming  language.  The Company attempted to develop
and market this asset without success in 1995. This software technology was sold
to a third  party  in the  second  quarter  of  1996.  See  Note 3 of  Notes  to
Consolidated Financial Statements for the year ended December 31, 1996.

     During December 1994, the Company acquired  MapLinx,  Inc.  ("MapLinx"),  a
provider of PC based  software  that  allows for  geographical  presentation  of
database information.  See Note 3 of Notes to Consolidated  Financial Statements
for the year ended December 31, 1996. In conjunction with the Company's decision
to focus its activities on exploitation  of the  d.b.Express  technology and its
Softworks subsidiary, the Company sold the net assets of MapLinx in 1997.

     During  December  1994,  through  its  Softworks  subsidiary,  the  Company
acquired DBopen, Inc. ("DBopen"), a provider of PC database administration tools
employing  client/server  technology.  During the third quarter of 1995, certain
new products  pertaining  to this  acquisition  were  introduced  in the market.
During the fourth  quarter of 1995,  as a result of limited  sales and  changing
market conditions,  it was determined that significant  additional  expenditures
would have to be incurred to modify the  product to meet these  changing  market
conditions. In the opinion of management,  such additional expenditures exceeded
the potential benefits, and, accordingly, a decision was made to discontinue the
products.  Consistent  with this  decision,  the Company  wrote-off the carrying
value of its  investment in the DBopen  acquisition  of $1,317,000 in the fourth
quarter of 1995.
<PAGE>

     The  Company's  long-term  strategic  plan  is  focused  upon  becoming  a
preeminent  provider of innovative  software  products which break down barriers
between people and data through sales of existing  products and new technologies
as well as continuing to support the  Softworks'  mainframe  sector . To achieve
its  goals the  Company  plans  growth  of  d.b.Express  primarily  through  the
development of vertical markets,  initially in the telecommunications  industry.
The Company s primary strategy will focus  principally on software tools for the
data  warehousing  markets and the  ability to access the data via the  Internet
without the need to download the data first.  These  markets are being driven by
wide-scale  corporate  right-sizing  and the  empowerment  of  people  to access
enterprise-wide  data, both of which create greater  efficiencies  and corporate
profits.  The  Company  also plans to  capitalize  on its new  business  unit by
providing  information  technology,  support and services by offering solutions,
support, and strategies to solve various business needs in such areas as network
determinations,   help  desk  applications,   wiring/cabling,  LAN  connections,
moves/adds/changes and project management.

     During the first quarter of 1995,  the Company  reorganized  its management
team. A new business plan was developed and implemented, with the major focus of
the new business plan being the development of strategic alliances, and securing
d.b.Express license agreements with major software companies, which has since be
refined to focus on the vertical market of the telecommunications  industry. The
first evidence of potential future success of this plan was announced on June 1,
1995,  regarding a development  agreement  with Oracle  Corporation  ("Oracle").
Thereafter, the Company also entered into development or license agreements with
International  Business Machines,  Inc. ("IBM"),  Dell Computers  ("Dell"),  and
Information Builders, Inc. ("Information Builders").  The Company was advised in
the second quarter of 1996 that Dell Computers had discontinued the distribution
of  d.b.Express.  None of  these  agreements  provide  for any  level  of  sales
commitment and to date sales from such agreements have been insignificant.

     In  December,  1995 the Company  formed what it considers to be a strategic
alliance with one of the world s largest  systems  integrations  and  consulting
organizations,  Perot Systems Corp. ("Perot Systems"),  headquartered in Dallas,
Texas.  This  agreement   permitted  Perot  Systems  to  market  and  distribute
d.b.Express,  not only to its present  customer base , but also to oversee world
wide distribution as well. Pursuant to this agreement, Perot Systems was to earn
30% percent  commissions on certain sales of d.b.Express and received options to
purchase up to 500,000 shares of the Company's  common stock at $2.56 per share.
Additionally, Perot Systems had the ability to increase their equity position in
the Company,  through the  exercise of up to an  additional  2,250,000  options,
based on  sales of  d.b.Express  in  excess  of  $5,000,000  up to  $50,000,000,
however,  as a result of a change in  management at Perot  Systems,  the Company
elected to  terminate  the  formal  agreement  between  the  Companies  and said
2,250,000 options are no longer contractually obligated.  Although the agreement
is no longer  effective,  the Company and Perot  Systems are  continuing to work
together on ongoing  proposals,  and commissions will be negotiated on a case by
case basis on  business  which may  result  from this  relationship.  During the
fourth  quarter of 1995,  the Company also entered into various other  marketing
and consulting agreements expiring at various dates through November,  2000. The
Company issued 1,678,000  options at $1.50 per share to purchase common stock in
connection with these agreements.  Subsequently, 1,000,000 of those options were
terminated  in exchange for 400,000  shares,  and 300,000 of those  options were
repriced to $.01 in 1997.  Pursuant to such  agreements,  certain firms have the
ability  to earn up to  600,000  options  at a price of  $1.50  per  share  upon
attaining  defined  levels  of  d.b.Express  product  revenues.  None  of  these
agreements provide for any level of sales commitment and to date sales from such
agreements have been insignificant. In November, 1997, the Company announced the
signing of an agreement  with a major  telecommunications  company from which it
anticipates  significant  d.b.Express  revenues  in  1998.  Due  to  contractual
restrictions,  the Company cannot presently  comment further on the terms of the
agreement,  but  anticipates  to be able to  release  more  details  in the near
future.
<PAGE>

     PRODUCTS

d.b.Express

     d.b.Express  provides  business  with a simple,  fast,  low-cost  method of
finding,  organizing,  analyzing  and using  information  contained in databases
through a  visually-based  proprietary  software  tool.  The software  employs a
unique  graphical user interface  ("GUI") that enables users to directly  access
and use  information  contained in relational  and  pseudo-relational  databases
created by many database management systems ("DBMS") on the market. In addition,
this proprietary  software tool has the ability to directly utilize  information
obtained from  spreadsheets  and data in the form of American  Standard Code for
Information  Interchange  ("ASCII")  files.  The  technology  has  been  further
improved  to  enable  it to  analyze  millions  of  records  and to act over the
Internet   without  the  need  to  first  download  the  data  being   analyzed.
Telecommunications  industry  specific  applications of the technology have also
been developed and are now being marketed.

     d.b.Express  does not replace  DBMS  programs.  Instead,  it  improves  the
accessibility  of  databases  created by DBMS by  eliminating  the need to write
queries in  computer  code and  facilitates  data  searches  through  the use of
graphical query tools.  Prior to the  availability  of  d.b.Express,  comparable
analytical  and  presentation  capabilities  were possible  only through  costly
executive  information  systems  ("EIS") or  customized  programs  developed and
supported by highly-skilled  MIS  professionals.  The need for MIS professionals
and programming effectively raises the cost of access to information in terms of
time and  money.  Ultimately,  these  barriers  result in less  timely and lower
quality business decision-making.

     There are some DBMS access tools on the market that claim to eliminate  the
need to use computer code and provide graphical query  capability.  All of these
programs,  however,  only simplify the writing of computer code, usually through
industry-standard  structured  query language  ("SQL"),  by having users develop
logic in a  semi-procedural  facility.  While reducing some problems  associated
with the writing of computer code, such as "typographical  errors",  they do not
eliminate  the need for  knowledge of computer  code or database  structure  and
organization,  and require significant training of the user. d.b.Express enables
the access and productive use of complex databases without computer  programming
or knowledge of SQL.

     d.b.Express approaches database accessibility uniquely,  enabling people at
all levels of an  organization  to analyze  the data  without any  knowledge  of
programming.  d.b.Express  achieves  this  in  two  steps.  First,  d.b.Express,
utilizing proprietary algorithms,  accesses and automatically  summarizes all of
the records in the required databases into its own format.  Second, the software
presents users with an intuitive multi-dimensional picture of the data which the
user can easily  customize to his need with a simple point and click  interface.
In  addition  to  a  vast   simplification  of  database  access  and  analysis,
d.b.Express  performs these tasks faster than any DBMS because the software does
not  reread the  database  for each task;  it only  reads the  summaries  it has
created.

     The advantages inherent to d.b.Express include the following:

     Ease of Use

     Using the  analogy of an  automatic  camera,  d.b.Express  simplifies  data
access and analysis by providing a sophisticated,  simple-to-use vehicle to take
pictures of complex  data. By combining an intuitive  point and click  interface
with  a  powerful  integration  and  retrieval  engine  in a  low-cost  product,
d.b.Express  breaks down the barriers between people and data. After d.b.Express
has  read  one or  more  databases,  the  data  is  presented  to the  user in a
"filescape"  using a common bar chart metaphor.  The user merely points to a bar
in the chart and  clicks to view  data  from the  highest  summary  level to the
lowest level of detail. d.b.Express provides powerful desktop functionality that
allows the exploration of data patterns, trends, and exceptions.  Data searches,

<PAGE>

queries  and  analyses  can be  converted  to  sophisticated,  but simple to use
presentations   providing   integrated  business  graphics  and  report  writing
capabilities.

     Interfaces With Leading Databases and Other Tools

     d.b.Express  provides  direct access to leading  databases  created by DBMS
vendors,  including  CA-Clipper,  Microsoft  Access,  Foxbase and FoxPro,  Lotus
Approach,  Borland dBase and Paradox,  Oracle,  Informix,  Sybase,  Ingres,  SQL
Server, IBM DB2 and DB2/2, Netware SQL, Gupta SQL Base,  Progress,  XDB, SQL/DS,
Teradata and  Btrieve.  These DBMS's  represent  more than 85% of the  installed
relational  database  management  systems  ("RDBMS")  worldwide.   In  addition,
d.b.Express  is able to access data contained in  spreadsheets  and read data in
ASCII format which  further  broadens the software s capability  with other DBMS
products.  d.b.Express results can be exported to popular  spreadsheets,  report
writers,  graphics  packages and word processors  including Lotus 1-2-3,  Excel,
Quattro  Pro,  ReportSmith,  Crystal  Reports,  Harvard  Graphics,  Power Point,
WordPerfect and Word.

     Ability To Integrate Data From Databases Created By Multiple Vendors

     When  d.b.Express  reads  a  database  it  creates  its  own  summaries  of
information through its proprietary process.  Information contained in databases
is formatted into d.b.Express  proprietary  format. This permits users to access
and  compare  information  contained  in  enterprise-wide  databases  created by
different vendors simultaneously in the d.b.Express user-friendly environment.

     Works in Common Operating Environments

     d.b.Express   operates  in  virtually  all  file  server  and  peer-to-peer
networking  environments  providing data to Microsoft Windows and Windows NT and
DOS Intel-based  workstations.  Computer Concepts,  through technology synergies
afforded by  Softworks,  is  designing  extensions  to  d.b.Express  that can be
installed  on  mainframes.  The  ability  to operate  on  mainframes  would open
substantial new markets for the application of d.b.Express.

     High Processing Speed

     Once  a  database  has  been  read  by  d.b.Express,   d.b.Express  employs
proprietary matrix storage technology rather than rereading each data element in
that  database.  All packaged  DBMS reread every single data element each time a
task,  such as  sorting  or  analysis,  is  performed.  The  elimination  of the
rereading step through  d.b.Express  proprietary  process  vastly  increases the
speed of data access enabling ad hoc analysis at a rate far faster than possible
with any other  system.  The  advantage  of the  d.b.Express  process over other
processes increases with the size and complexity of the database.

     d.b.Express breaks down barriers between people and data by eliminating the
need for SQL  expertise,  saving time by gaining  decision-critical  information
through  rapid  data  access and  analysis,  and saving  money  through  minimal
training investment and cost-effective product implementation.

     Windows  Version 1.0 of d.b.Express was introduced in December 1993 and the
DOS version was introduced in late 1992. Windows Version 2.0, with significantly
enhanced  functionality  based on user  feedback,  was  introduced in the second
quarter of 1994 and Windows 95 Version was  introduced  in the third  quarter of
1995.  Windows NT, Internet Server and JAVA Applet versions have been introduced
in 1996 and 1997.
<PAGE>

     Disadvantages in regard to d.b.Express include the following:

     Lack of Established User-base and Acceptance of the Product

d.b.Express is not yet widely used in the computer  industry and is perceived as
a new  technology  which many  users may defer  usage of until the  product  has
established its use by large numbers of users. The Company believes its focus on
large  scale  users and its new  Internet  access  technology  will lead to such
usage,  however,  there is no assurance  that the Company will be  successful in
implementing sales and wide based usage of the product.

     Limited Resources to Market and Promote d.b.Express

The  Company  has  limited  cash  resources  with  which to market  and  promote
d.b.Express,  and regardless of the unique patented  aspects of the product,  if
the  Company  is not able to  effectively  market and  promote  the usage of the
product,  the successful  dispersion of the product as a widely used access tool
may not be achieved.

     Alternative Methods Available to Access Data and Potential New Technologies

d.b.Express' access method is patented and unique, however,  alternative methods
for accessing  data exist,  primarily text based search  engines,  which are not
able to access large quantities of data with the nearly instantaneous results of
d.b.Express  and/or without knowledge of specific database query languages.  The
Company  is not  aware of any  alternative  technology  which  can  effect  data
searches with the speed, and without  sophisticated  programming  skills,  which
d.b.Express  provides,  however,  it is possible that new  technologies  will be
developed  which  may  effectively   compete  with  d.b.Express.   If  such  new
technologies are developed,  they could negatively  impact the Company's ability
to successfully market and promote d.b.Express.

     The  Company is  currently  in  discussions  with  several of the  computer
software  industry s leading  companies.  On June 1, 1995, the Company announced
that it had signed an agreement  with Oracle whereby the Company is making a new
version of its d.b.Express software available to Oracle database users, enabling
them to make use of Computer  Concepts patented data  visualization  technology.
The Company also has entered into  development or license  agreements  with IBM,
Dell and Information Builders, and entered into a world-wide sales and marketing
agreement with Perot Systems of Dallas,  Texas, in December,  1995, however, the
Company  was  advised in the  second  quarter  of 1996 that Dell  Computers  had
discontinued  distribution of d.b.Express.  The Oracle and IBM agreements enable
the Company to provide  "tightly  integrated"  versions of d.b.Express to Oracle
and IBM "OS/2"  users,  effectively  making the  product's  usage  "seamless" or
"transparent"  to the user.  Although  this enables the Company to better market
d.b.Express  to the large numbers of Oracle and IBM OS/2 users,  and the Company
anticipates  that  sales  will  be  generated  as a  result  of  these  "tightly
integrated" versions, the agreements do not guarantee such sales.
 The Information Builders agreement provides for royalty payments to the Company
based on sales of its hardware and software  products which include  d.b.Express
software  technology.  The  Perot  Systems  agreement  provided  for  sales  and
marketing activities regarding the d.b.Express  technology whereby Perot Systems
was  to be  compensated  based  on  certain  sales  and  royalty  revenues  from
d.b.Express,  however, no minimum purchases or sales were required. Although the
Company  believes these  agreements  will produce  revenues,  until a history of
sales is  established,  there is no assurance  that any of the  agreements  will
produce  such  revenues,  and to date,  revenues  have been  insignificant.  The
Company  recently  announced  that  it has  signed  an  agreement  with a  major
telecommunications  company and anticipates  receipt of significant  d.b.Express
revenues  therefrom  in 1998,  however,  due to  contractual  restrictions,  the
Company is unable to presently  further discuss the terms of the agreement,  but
anticipates  that it will be able to  release  additional  details  in the  near
future.
<PAGE>

     Softworks' Systems Management Software Products

     Systems  management   software  products  provided  by  Softworks  optimize
mainframe  system  performance,  reduce  hardware  expenditures  and enhance the
reliability  and  availability  of the data  processing  environment.  Softworks
products enable  corporate data centers to extend the life of their current data
processing investments,  defer expensive hardware and software upgrades, prevent
downtime  caused by software  failures,  automate data recovery  processes,  and
thereby improve personnel productivity.  Softworks is recognized as an expert in
system performance  management,  and data and storage management,  and leverages
its expertise by  integrating it into products that are intuitive and proactive,
while  other  vendors  just  monitor and report.  Softworks'  products  increase
product value and achieve  market  differentiation  by providing the ability and
necessary  intelligence to establish  controlled  automation that is designed to
react and resolve. Softworks calls this differentiating characteristic Softworks
SavanTechnology,   which  increases  the  customers  ability  to  fully  exploit
technology investments without requiring additional manpower and expertise.

     Softworks  current systems  management  product  offerings include new Year
2000 products which address the assessment and testing  portion of the year 2000
problem,  as  well as HSM  Agent  and  TeraSAM,  Catalog  Solution,  Performance
Solution,  VSAM Assist,  Capacity Plus for VSAM, Space Recovery  Facility,  VSAM
Quick Index, and VSAM Space Manager.  During 1996, Softworks,  released enhanced
versions of all existing products except one, providing  increased  capabilities
and making all of the  products  year 2000  ready.  Softworks  is also  actively
developing  additional  Year 2000  relevant  products.  Softworks  products  are
divided into four arenas,  the Performance  Arena,  the DataStor Arena, the Year
2000 Arena and the fourth arena which is still under  research and  development,
the Communications Arena.

     The Performance  Arena family of products  comprise a set of solutions that
help derive  maximum  performance  from  enterprise  systems  and  applications.
Softworks  performance  products  approach the  performance  challenge  from the
application,  task, and system levels. The products address such key performance
issues as; dynamic I/O tuning;  dumping and restoring data;  extending operating
systems  capabilities;  performance  balancing,  and determining the performance
impact of changes to an environment.

     The DataStor  Arena,  addresses  system  availability  and data and storage
management  issues.  Softworks'  DataStor  Arena  solutions  are  recognized  as
solutions for addressing  system  availability  issues and effectively  managing
data both  logically  and  physically.  Softworks  has a history  of  aggressive
product  enhancement and  development as evidenced by its  introduction of three
major new products  during 1995 and 1996, and now the  introduction  of its Year
2000 products and the anticipated release of a suite of multi-platform  products
later in the second quarter of 1997. Of these new products,  TeraSAM facilitates
the  management  and  maintenance  of large  files,  and  relieves the file size
limitation for IBM's VSAM files. QuickTune, the second new product, provides the
ability to analyze program execution and identify system and program performance
bottlenecks, and CenterStage/MVS,  provides proactive storage management, and is
the first component of  CenterStage/MP,  the  multi-platform  storage management
suite of products.

     The Year 2000 suite of  products  include  HotDate  2000/Simulate,  HotDate
2000/Discovery  and HotDate  2000/Test  which address the critical  processes of
identifying,  diagnosing  and  simulating  the year 2000  issues  throughout  an
enterprises  environment.  The products'  capabilities include the simulation of
clock   transitions  on  critical   applications  and  provide  the  ability  to
simultaneously  simulate  the year 2000  date  change  and  analyze  its  impact
throughout the enterprise without impacting  production;  identification of date
oriented data and program code and their inter-relationships, and the ability to
identify  system date  processing in object code and during real time execution,
however,  there  can be no  assurances  whether  there  will be any  significant
revenues from the Year 2000 suite of products.
<PAGE>

     The mainframe market segments that Softworks products address are robust as
evidenced by the continuing increase industry-wide in the number of "MIPS" and a
significant  increase in Softworks' 1996 product licensing  revenues,  and these
market  segments  are  expected  to remain so for the  foreseeable  future.  The
multi-platform  and Year 2000 markets are also  anticipated  to grow through the
millennium.

     Other Product

     As a reseller,  the  Company  also  markets  "Perspective  for  Windows," a
three-dimensional graphics presentation product.

SALES AND MARKETING

     d.b.Express is currently being marketed to the telecommunications industry,
governmental entities,  financial services industry,  Fortune 1000 companies and
OEM  s  (producers  of  other  software   products   incorporating   d.b.Express
technology) in the United States.  The Company  utilizes a direct sales force as
well as an indirect  network of  distributors  and resellers for this market The
Company s direct sales force presently  consists of sales and support  personnel
operating from the Company's  headquarters  in Bohemia,  New York. The Company's
services  unit  provides a wide array of  information  technology,  support  and
services  which  offer  solutions,  support,  and  strategies  to solve  various
business needs in such areas as network determinations,  help desk applications,
wiring/cabling, LAN connections,  moves/adds/changes, and project management, as
well as overseeing new installations and offering on-site component repair.

     Softworks holds over 2,400 licenses for its products in over 1,800 customer
installations  worldwide.  The products are installed in approximately 80 of the
Fortune 100  Companies  data centers.  The Company  maintains  strategic  vendor
alliance  relationships with IBM,  Microsoft and Sybase.  These programs provide
Softworks  access to  pre-release  versions  of software in order to ensure that
Softworks  products  exploit the newest  technology  and are  compatible  to new
operating  systems and data base releases.  The programs also provide  Softworks
with insight for strategic planning and product direction.

     Softworks  markets its products and services to both the United  States and
Canada  through  its North  American  sales  staff and  offices  and a  Canadian
distributor.  Softworks  sales and  marketing  activities  targeting  the United
Kingdom,   Ireland,  and  the  Benelux  countries  emanate  from  the  Softworks
international  office in Harpenden,  U.K. During 1994 and early 1995,  Softworks
also opened new markets in Turkey,  Hong Kong, and South  America,  and recently
opened an office in France.  The Company markets to a host of other countries in
the  international  community through a network of distributors that service the
following countries: Italy, France, Germany, Switzerland,  Scandinavia,  Israel,
Japan, Australia/New Zealand, Singapore, Thailand, South Africa, and Brazil.

     Softworks generates almost half of its income by selling perpetual licenses
for the use of its  products.  Pricing  for  mainframe  products is based on the
computational capacity of the CPU s on which the software operates.  Pricing for
non-mainframe and cross-platform varies from enterprise-wide  agreements to "per
seat"  pricing.  The Company also  generates  revenue  through  maintenance  and
support agreements that are reviewed annually on the anniversary of the original
purchase date. In 1996 , approximately half of total Softworks revenue came from
recurring  maintenance  and  support  agreements.  The  renewal  rate for  these
contracts is over 95%. Other  revenues are generated  when product  licenses are
transferred to different/larger CPU s. No customer of Softworks comprised 10% or
more of the Company s 1996 consolidated revenues.

     In  accordance  with  industry  practice,  the Company s personal  computer
products  are  licensed  under  "shrink-wrap"  license  agreements  contained in
product packages in which the end-user  acknowledges  license term acceptance by
breaking  package  seals.  The Company s mainframe  products are licensed  under
site-specific license agreements.
<PAGE>

Seasonality and Backlog

     The Company s quarterly  results  are subject to  fluctuations  from a wide
variety of factors  including,  but not limited  to, new product  introductions,
domestic   and   international    economic   conditions,    customer   budgetary
considerations,  the Company s sales  compensation  plan,  the timing of product
upgrades,  customers'  support  agreement  renewal cycles and fee recognition in
connection with exclusive distribution and other agreements.  As a result of the
foregoing  factors,  the  Company s  operating  results  for any quarter are not
necessarily indicative of results for any future period.

     The Company generally produces inventory shortly before anticipated product
shipment.  Accordingly,  the Company  has not  experienced  significant  product
backlog  nor  believes  that the  existence  of  product  backlog  is a relevant
indicator of future sales performance.

Manufacturing and Distribution

     The Company  currently  contracts the  manufacture  of software  diskettes,
product  documentation  and  packaging  for  its  d.b.Express  product  line  to
non-affiliated  third-party  manufacturers.  Due to the  existence  of  numerous
companies providing  manufacture of these items, the Company is not dependent on
any one contractor.

     Softworks produces its own tapes and is not dependent on any one contractor
for materials.

Competition

     The Company s products  are marketed in a highly  competitive  environment.
Such   environment  is   characterized   by  rapid  change,   frequent   product
introductions and declining prices. Further, the Company s PC products have been
designed  specifically  for use on the Intel X86 family of computers,  utilizing
other well known database products. No assurance can be given that the Company s
patents and copyrights will effectively  protect the Company from any copying or
emulation of the Company s products in the future.

     The Company  considers  certain  end-user  data  access tool and  executive
information  system  software  companies to be  competitors  to its  d.b.Express
product including Trinzic  Corporation,  Cognos,  Inc., Comshare Corp. and Pilot
Software,  Inc. The Company  believes that  d.b.Express can compete  effectively
against  such  companies  product  offerings  based  on  ease  of  use,  lack of
programming, data access speed and price.

     Softworks  products  compete with offerings from Boole & Babbage,  Computer
Associates  International  Inc., BMC, Compuware and Platinum  technologies.  The
products  compete  effectively  based on quality of support,  price, and product
quality.  Many of the  Company s  existing  and  potential  competitors  possess
substantially  greater  financial,  marketing and technology  resources than the
Company.

EMPLOYEES

     The  Company  had 203  employees  at  January 1, 1998,  including  85 in
marketing,  sales and  support  services,  88 in  technical  support  (including
research and development) and 30 in corporate  finance and  administration.  The
future  success of the  Company  will  depend in large  part upon its  continued
ability  to  attract  and  retain  highly   skilled  and  qualified   personnel.
Competition  for such  personnel  is intense,  and the  Company has  experienced
turnover in its  management  group.  The Company has  employment  contracts with

<PAGE>

certain of its subsidiary  executive  officers.  None of the Company s employees
are represented by a labor union.  The Company  believes that its relations with
its employees are good.

PATENTS AND TRADEMARKS

     The Company has three federally registered trademarks: "CCC" , "d.b.Express
" and "dbACCEL" . In addition, the Company received a patent for the proprietary
aspects of its d.b.Express technology in 1994, and a second,  expanded patent on
that  technology in 1995,  which  broadened  the claims  regarding the product's
graphical  interface and indexing.  Softworks has received  copyrights for their
entire product line.

PROPERTIES

     The Company leases various  facilities for its Corporate  headquarters  and
subsidiary operations, as follows:

<TABLE>
<CAPTION>


Description      Location        Square Footage      Lease term         Annual Rental
-----------      --------        --------------      ----------         -------------
                                                                             Cost
                                                                             ----
<S>             <C>                 <C>             <C>                  <C>
Corporate       Bohemia, NY         10,000          7/1/94 - 6/30/98     $144,000 (1)
Subsidiary      Alexandria, VA      25,000          9/1/94-8/31/2001     $318,000 (2)
<FN>
(1) The primary lease for the Bohemia,  N.Y. facility was renegotiated  effected
January 1, 1996 to a base rent of $12,000 monthly.  Further,  the lease provides
for annual  increases of  approximately 4% and is renewable at the option of the
Company for an additional year term at the end of its initial term. In February,
1997,  the Company  negotiated an additional  two year  extension  (July 1, 1998
through June 30, 2000) to the term of the lease.  the extended  period calls for
base rents to increase to $12,600 per month throughout the term.

(2) Lease provides for annual  increases of 3% per year, and is renewable at the
option of the Company.
</FN>
</TABLE>


CHANGE IN ACCOUNTANTS

     On May 22, 1997, with the approval of the  Registrant's  Board of Directors
and  Audit  Committee,  the  Registrant  dismissed  Grant  Thornton  LLP  as its
independent accountants for the year ending December 31, 1997.

     Grant Thornton  LLP's reports on the financial  statements for the past two
fiscal years  contained no adverse opinion or disclaimer of opinion and were not
qualified or modified as to uncertainty,  audit scope or accounting  principles,
other than to include in their report for the Company's financial  statements as
of and for the year ended  December  31, 1996,  the  following  statement:  "The
accompanying  consolidated financial statements have been prepared assuming that
the Company  will  continue  as a going  concern.  As shown in the  consolidated
financial  statements,  the Company continued to sustain  significant losses and
use substantial amounts of cash in operations during the year ended December 31,
1996.  These factors,  among others,  as discussed in Note 1 to the consolidated
financial  statements,  raise  substantial  doubt about the Company's ability to
continue as a going concern.  Management's  plans in regard to these matters are
also  described  in  Note  1.  the  financial  statements  do  not  include  any
adjustments that might result from the outcome of this uncertainty."

     During the two most recent fiscal  (calendar) years and through the date of
dismissal (May 22, 1997) there were no disagreements  with Grant Thornton LLP on
any matters of accounting principle or practice,  financial statement disclosure
or auditing scope or procedure, which disagreement(s),  if not resolved to Grant
Thornton  LLP's  satisfaction,  would have  caused  Grant  Thornton  LLP to make
reference to the subject matter of the  disagreement(s)  in connection  with its
reports on the Registrant's financial statements.

     The  response  letter  from  Grant  Thornton  LLP  required  by Item 304 of
Regulation S-K was filed as an exhibit on Form 8-K and is hereby incorporated by
reference.

     On June 2, 1997, with the approval of the  Registrant's  Board of Directors
and Audit Committee,  the Registrant  retained Hays & Company  (internationally,
Hays  Allan  Affiliates)  as its  independent  accountants  for the year  ending
December 31, 1997.

LEGAL PROCEEDINGS

     During May 1994,  the Company and certain  officers  received  notification
that they had been named as defendants in a class action claim [Nicholas  Cosmas
v Computer Concepts Corp., et al; United States District Court, Eastern District
of New York]  alleging  violations  of certain  securities  laws with respect to
disclosures  made regarding the Company s acquisition of Softworks,  Inc. during
1993. Class  certification  was granted on February 6, 1995. The Company and its
officers  have  answered  the  complaint in the action,  denying all  wrongdoing
whatsoever  alleged,  and continue to deny all alleged  wrongdoing,  however, to
avoid further substantial  expense,  risk,  inconvenience and the distraction of
the litigation,  and to put to rest all  controversies  raised in the action,  a
settlement  of the matter was  approved by the court  resulting  in payment of a
settlement fund of shares of common stock of the Company with a minimum value of
$2,000,000  plus a cash  payment  of  $75,000  for the  benefit of the class and
payment of Plaintiff's  counsel's legal fees as approved by the court out of the
settlement fund. The Company posted a charge to earnings in the first quarter of
1996 of  $2,075,000  to reflect  this  settlement  consisting  of  $75,000  plus
2,614,000 shares of the Company's Common Stock.

     In September 1994, the Company received notice of an action alleging breach
of contract regarding an acquisition  transaction initiated during 1993. In July
1995, a settlement  agreement,  effective June 30, 1995, was reached whereby the
Company was  required to pay $75,000 and agreed to an  amendment of the original
contract  to  secure  additional  software  license  rights.  Pursuant  to  such
amendment,  the Company issued a  non-interest  bearing  promissory  note in the
amount of $388,800 payable in 36 monthly installments due September 1, 1998, and
has made timely payments thereon, which amount was recorded as an unusual charge
in the 1995 Consolidated Statement of Operations.
<PAGE>

     In March 1995, an action  (Barbara  Merkens v Aval Guarantee  Ltd.,  Walter
Mennel, J. Forror,  A.  Faehndrich-Baun,  T & M Consulting AG, M. Schmidt,  E.G.
Baltruschat and Computer Concepts Corp.;  United States District Court,  Eastern
District of New York) was originally  commenced against the Company and a number
of  defendants  all of whom are  unrelated  to the Company,  alleging  fraud and
conversion  claims  in  regard  to those  defendants  unrelated  to the  Company
regarding a  transaction  wherein the  defendants  unrelated  to the Company are
alleged to have transferred  certificates  representing 10,000,000 shares of the
Company's common stock.  The certificates had not been legally acquired from the
Company and the  certificates  were  reported  to the  Securities  and  Exchange
Commission by the Company as stolen certificates.  In early 1997, after a change
in counsel, the plaintiff amended the complaint for a second time, now naming as
defendants  only the  Company  and three of its  officers.  The  second  amended
complaint  alleges  that  certain  third  parties,  unrelated  to  the  Company,
transferred certificates  representing 10,000,000 shares of the Company's common
stock to the  plaintiff.  The  complaint  further  alleges that such shares were
endorsed in blank by the third parties and became bearer  securities  which were
negotiated to the plaintiff by physical delivery.  Plaintiff requests validation
of the transfer of the  certificates  and is seeking  damages of an  unspecified
amount,  consisting of alleged  diminution in market value of the subject shares
from 1994 through the date of any judgment in the plaintiff's favor. The Company
and its officers  believe that the  Company's  position  regarding the claim has
substantial factual and legal support and are vigorously defending the matter.

     In July 1995, a class action (Emmanuel Aryeh v. Computer  Concepts Corp. et
al) was commenced  against the Company and certain of its officers and directors
in the United  States  District  Court,  Eastern  District of New York.  In this
complaint,  the plaintiff alleges  violations of Section 10(b) of the Securities
and Exchange  Act and Rule 10b-5  promulgated  thereunder,  arising from certain
alleged  misrepresentations  and  misstatements by officers of the Company which
occurred  in or  about  June  1995.  On  August  15,  1995  an  action  alleging
substantially  the same claims (Zev Nadler v. Computer Concepts Corp. et al) was
commenced  in the same court and three more  identical  or similar  actions were
also  commenced  in  the  Eastern  District.   The  five  complaints  have  been
consolidated into one action. The matter has been settled pending final approval
by the court,  and if  approved,  the company will deliver and place into escrow
1,000,000  shares of its common stock. In the event that the average closing bid
of the Company's  common stock for the ten trading days prior to the  settlement
hearing is less than $.50 per share, the Company will issue  additional  shares,
determined by dividing  $500,000 by the ten day average less the shares  already
placed into escrow.  Further,  the Company and its  insurance  carrier will each
deposit into escrow  $350,000,  totaling  $700,000.  Based upon the  Stipulation
Agreement,  the Company had  recorded in the  quarter  ended June 30,  1997,  an
$850,000 Unusual Charge to earnings.

     In late November,  1995,  Fletcher  Capital Corp. filed a claim against the
Company,  Daniel DelGiorno and several unrelated parties (Fletcher Capital Corp.
v Computer  Concepts  Corp.,  et al) in Superior  Court for Camden  County,  New
Jersey,  regarding a claim for an unspecified  amount of commissions in the form
of options  from the  Company and cash from the other  parties.  This matter was
settled with the issuance of 360,000  options  exercisable at $.35 per share and
$126,000 paid with 252,000 shares of common stock and payments totaling $31,000.

     On June 11,  1996,  the  Company  received  notice  of  entry of a  default
judgment  against  it for  $1,500,000  and  specific  performance  to effect the
registration  of common stock held by Merit  Technology,  Inc. in a matter which
the Company had not been served or received notice of (In Re: Merit  Technology,
Inc.,  Debtor,  U.S.  Bankruptcy Court,  Eastern District of Texas). The Company
timely  filed a motion to set aside the  default  judgment  based on the lack of
service and meritorious  defenses. On August 13, 1996, the default was set aside
by the court and  during  December,  1996,  this  matter  was  settled  with the
issuance of 100,000 shares of common stock.

     During  March,  1997,  the Company  received a Complaint  filed in the U.S.
District Court for the Western District of Texas, by Dell Computer  Corporation.
A Second Amended Complaint alleges that the Company failed to deliver product as
contract  for and  further  alleges  damages  in  excess of  $850,000.  Based on
consultation  with legal  counsel,  the Company and its  officers  believe  that
meritorious  defenses  exist  regarding  the  claims  and  they  are  vigorously
defending against the allegations. The Company is unable to predict the ultimate
outcome of this claim,  which could have an adverse  impact on the  consolidated
financial position and results of operations of the Company, and accordingly, no
adjustment has been made for any potential loss.
<PAGE>

                                   MANAGEMENT

Directors and Executive Officers

     As of January 16, 1998, the names, ages and positions of the directors and
executive officers of the Company are as follows:
<TABLE>
<CAPTION>

        Name             Age                       Position
        ----             ---                       --------  

<S>                      <C>            <C>
Daniel Del Giorno, Sr.   65             Chairman, Ass't. Sec. and Director

Daniel Del Giorno, Jr.   42             President, CEO, Treasurer, Director

Russell Pellicano        56             Secretary, Director

Jack S. Beige            52             Director

Augustin Medina          56             Director

Edward Warman            53             Exec. V. P.  of Products and Services

George Aronson           47             Chief Financial Officer
</TABLE>

     Daniel Del  Giorno,  Sr. has been  Chairman,  Chief  Executive  Officer (to
October,  1997),  Assistant  Secretary and a director of the Company since April
1989, and is the father of Daniel Del Giorno,  Jr., the Company's  President and
also a  director.  During the period 1987 to April  1989,  Mr. Del  Giorno,  Sr.
together  with Mr.  Pellicano  (director  of the  Company)  was  engaged  in the
research and development of d.b.Express.  Prior thereto,  during the period 1985
to May 1987,  Mr. Del Giorno,  Sr. was the Chief  Executive  Officer of Myotech,
Inc.  ("Myotech"),  a privately held  corporation  which  produced  computerized
muscle testing equipment for chiropractors and physical therapists.  Myotech was
sold to  Hemodynamics,  Inc. in May 1987 and later became a public  corporation.
Mr. Del Giorno, Sr. was a practicing chiropractor for many years and had founded
a chiropractic clinic employing 4 chiropractors and 6 technicians in addition to
administrative  personnel. He also successfully  collaborated with Mr. Pellicano
in  connection  with  the  design  and  development  of  medical  equipment  for
comparative  muscle testing.  A patent has been granted to Mr. Pellicano and Mr.
Del Giorno, Sr. in connection therewith. In addition, Mr. Del Giorno, Sr. is the
holder  of a patent  for a  digital  myograph  for the  testing  of  muscles  by
computer.  Mr. Del Giorno,  Sr. is also an officer,  director and shareholder of
Tech Marketing  Group Corp.  which is a holding company and a shareholder of the
Company.  See "Security  Ownership of Certain  Beneficial Owners and Management"
and "Certain Transactions".

     Daniel Del Giorno, Jr., the Company's  President,  CEO, and a director,  is
the son of Daniel Del  Giorno,  Sr. and has been with the  Company  since  April
1989.  Prior to joining  the  Company and during the period 1987 to 1989 Mr. Del
Giorno,  Jr. was involved in providing the management and financial  support for
and collaborated  with Mr. Del Giorno,  Sr. and Russell  Pellicano in connection
with the development of d.b.Express.  During the period 1984 to May 1987, he was
the President of Myotech,  a privately  held Company  producing  muscle  testing
equipment.  He is also the President,  a director and principal shareholder with
Daniel  Del  Giorno,  Sr.  of Tech  Marketing  Group  Corp.,  a  privately  held
corporation  which is a shareholder of the Company.  See "Security  Ownership of
Certain Beneficial Owners and Management" and "Certain Transactions".

     Russell  Pellicano is a director and  Secretary of the Company since April,
1989 and served as Vice  President,  Secretary  and  Director  since  April 1989
through  February 1994. Mr.  Pellicano was the original founder and principal of

<PAGE>

RAMP  Associates  Inc.  ("RAMP"),  which was  acquired by the Company in October
1990,  through  which he has engaged in  consulting  to major  corporations  and
others for the design of software and hardware for  computers.  A major customer
of RAMP since its inception has been Grumman Corporation. Mr. Pellicano, through
RAMP, has been  consulting for Grumman and other  corporations.  He is the chief
architect  and designer of  d.b.Express  and has been  involved in designing and
developing  computer  software and  hardware  for the past 30 years.  Among many
noteworthy  projects for which he was  responsible at Grumman was the design and
installation  of  the  Orbiting  Astronomical  Observatory  Space  Craft  Ground
Station,  and he was a member of the launch team at Cape Kennedy in  conjunction
therewith. He was also Senior Systems Analyst for Grumman in connection with the
test  instrumentation  for the forward  sweep wing (X29)  experimental  aircraft
on-board computer system,  and the F-14D and the A-6E production  aircraft.  Mr.
Pellicano  is a  graduate  of C. W.  Post  College  in  1973  with a  degree  in
Electrical Engineering.

     Jack S. Beige, D.C., J. D., was appointed a director in November, 1995, for
a term  beginning  January,  1996,  and was  appointed  as a member of the Audit
Committee and the Compensation Committee, also effective January, 1996.
 Mr. Beige  received  his Juris Doctor  degree in 1993 and has been a practicing
attorney, primarily in business related matters, on Long Island, New York, since
then. Prior thereto, Mr. Beige practiced chiropractic medicine, was President of
BSJ Realty Corporation,  President of All Travel, Ltd. and was President of Comp
Consulting,  Inc. During his practice as a chiropractic doctor, he was elected a
Fellow of the International College of Chiropractors,  was appointed as Chairman
of the  New  York  State  Worker's  Compensation  Board,  Chiropractic  Practice
Committee  and  was  elected  President  of  the  New  York  State  Chiropractic
Association  in 1987.  Mr.  Beige is admitted to the New York State Bar and is a
member of the New York State Bar Association,  the Nassau and Suffolk County Bar
Associations and is a member of the American Arbitration Association.

     Augustin  Medina was  appointed a director in  November,  1995,  for a term
beginning  January,  1996, and was appointed as a member of the Audit  Committee
and the Compensation  Committee,  also effective January,  1996. During the last
five years and  previously,  Mr. Medina has been an independent  business broker
associated with the Montecristi  Corporation,  Gallagher Associates and Anderson
Credit and Leasing,  on Long Island, New York. Mr. Medina's business  background
includes advising and assisting  businesses in computer and non-computer related
businesses in their development and structuring of sales and marketing programs.

     Edward  Warman  joined the Company in September  1993 as Vice  President of
Products and Services.  From 1989 to 1993, he served as Vice President,  Product
Development  for  Comdisco  Disaster  Recovery  Services,   Inc.  where  he  was
responsible for the design and  implementation of a new product line of disaster
recovery software.  From 1984 to 1989, Mr. Warman was Vice President of Research
and  Development  at  Intersolv,   Inc.,  with  responsibility  for  a  software
development  staff  exceeding  100 people.  Prior to 1984,  he served in various
software  development  management  positions at  organizations  including Cincom
Systems, Inc., Computer Resources, and Monsanto. Mr. Warman possesses degrees in
systems analysis, economics and chemical engineering.

     George Aronson,  CPA, has been the Chief  Financial  Officer of the Company
since August,  1995. From March 1989 to August, 1995, he was the Chief Financial
Officer  of Hayim & Co.,  an  importer/distribution  organization.  Mr.  Aronson
graduated  from  Long  Island  University  with a major  in  accounting  in 1972
receiving a Bachelor of Science degree and is a Certified Public Accountant.

Executive Compensation

     The following table sets forth the annual and long-term  compensation  with
respect  to the  Chairman  and  Chief  Executive  Officer  and each of the other
executive  officers of the Company who earned more than  $100,000  for  services
rendered for the years ended December 31, 1996, 1995 and 1994. Directors are not
compensated  for their  services,  however,  the  outside  directors  received a
formula grant of stock pursuant to the 1995 Outside Directors Stock Plan.
<PAGE>

                           Summary Compensation Table
<TABLE>
<CAPTION>

                                 Annual Compensation                          Long-Term Compensation
                             -----------------------------      --------------------------------------------------
                                                                                             Securities      All
                                                                Other        Restricted      Underlying     Other
Name and                     Fiscal                             Annual      Stock Option      Options/      Compen-
Principal Position            Year       Salary   Bonus(4)      Compensation   Awards            SARS       sation
-------------------------------------------------------------------------------------------------------------------


<S>                          <C>       <C>      <C>           <C>           <C>             <C>               <C>
Daniel DelGiorno,Sr.,(1)(4)  1996      $259,000 $ 232,000     $     -             -               -           -
Director, Chairman           1995       240,000    84,000           -        1,280,000       1,280,000        -
Ass't Secretary              1994          -         -              -             -               -           -

Daniel DelGiorno, Jr.(1)(4)  1996          -      232,000           -             -               -           -
President, CEO, Treasurer    1995          -       84,000           -        1,280,000       1,280,000        -
Director                     1994          -         -              -             -               -           -

Russell Pellicano(1)         1996      195,000       -              -             -               -           -
Secretary                    1995          -         -              -          100,000         100,000        -
Director                     1994          -         -              -             -               -           -


Ed Warman (2)(4)             1996      116,000     53,000           -             -               -           -
Vice President of Products   1995      117,000       -              -          200,000         200,000        -
& Services                   1994      105,000       -              -             -               -           -


George Aronson (3)(4)        1996      144,000    187,000           -             -               -           -
Chief Financial Officer      1995       31,000       -              -           25,000         25,000         -


All Officers as a Group      1996     $714,000   $704,000           -             -               -           -
                             1995      388,000    168,000           -        2,885,000       2,885,000        -
                             1994      105,000       -              -             -               -           -
-----------
<FN>
Footnotes


(1) Stock options had an original exercise price of $2.56 per share,  their fair
market value at date of grant, and were repriced to reflect an exercise price of
$.50 per share  effective May 1995. D. Del Giorno,  Sr., and D.  DelGiorno,  Jr.
were each granted an aggregate  of 300,000  shares of stock and 180,000  options
exercisable  at $.50,  and  600,000  options  exercisable  at $1.50,  in May and
November 1995, and 750,000  shares in November,  1996,  600,000 of which options
were  repriced to $.01 in 1997,  and R.  Pellicano was granted  100,000  options
exercisable at $1.50 in November,  1995. (2) Mr. Warman was granted the right to
200,000  options in 1995  exercisable  at $1.50 and 200,000  shares in November,
1996. (3) Mr. Aronson joined the Company in September,  1995 as Chief  Financial
Officer. (4) Bonus amounts reflected above for the year ended December 31, 1996,
are in the form of the  Company's  common stock,  subject to forfeiture  and /or
restrictions,  except for shares  valued at $172,000  and $28,000  issued to Dan
DelGiorno, Sr and George Aronson, respectively.
</FN>
</TABLE>

                    Option/SAR Grants in Last Fiscal Year

     No options or SARs were granted to Named Officers in 1996

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option Value

    The  following  table set forth  certain  information  with respect to stock
option  exercises by the named  Executive  Officers during the fiscal year ended
December 31, 1996, and the value of  unexercised  options held by them at fiscal
year-end.
<PAGE>

<TABLE>
<CAPTION>
                                                                   Number of                            Value of
                                                                  Unexercised                         Unexercised
                                                                  Options at                         In-the-Money
                                                                  Fiscal Year                         Options at
                                                                    End(#)                         Fiscal Year End ($)(1)
                                                             -----------------------            -------------------------
                      Shares Acquired      Value
  Name                 on Exercise (#)   Realized ($)     Exercisable     Unexercisable       Exercisable   Unexercisable
  ----                ----------------   ------------     -----------     -------------       -----------   -------------
<S>                          <C>               <C>        <C>                     <C>            <C>                  <C>
Daniel Del Giorno, Sr.       -                 -          1,280,000               -              42,500               -
Daniel Del Giorno, Jr.       -                 -          1,280,000               -              42,500               -
Russell Pellicano            -                 -            100,000               -                 -                 -
Ed Warman                    -                 -            240,000               -                 -                 -
George Aronson               -                 -             25,000               -                 -                 -
<FN>
Footnotes


(1)  Market  Value of the  underlying  securities  at fiscal  year end minus the
exercise price.
</FN>
</TABLE>

Personal Liability and Indemnification of Directors

      The Company's  Certificate of Incorporation and Bylaws contain  provisions
which reduce the potential  personal liability of directors for certain monetary
damages and provide for indemnity of directors and other persons.

      Such  indemnification  provisions  are intended to increase the protection
provided  directors  and,  thus,  increase the Company's  ability to attract and
retain  qualified  persons to serve as directors.  The Company believes that the
substantial increase in the number of lawsuits being threatened or filed against
corporations  and their  directors and the general  unavailability  of directors
liability insurance to provide protection against the increased risk of personal
liability  resulting  from such  lawsuits  have  combined to result in a growing
reluctance  on the part of  capable  persons  to serve as  members  of boards of
directors of public companies. The Company also believes that the increased risk
of personal liability without adequate  insurance or other indemnity  protection
for its directors could result in overcautious and less effective  direction and
management  of  the  Company.  Although  no  directors  have  resigned  or  have
threatened  to resign as a result of the  Company's  failure to provide  greater
insurance  protection  or  other  indemnity  protection  from  liability,  it is
uncertain  whether  the  Company's  directors  would  continue  to serve in such
capacities if improved protection from liability is not provided.

      The provisions  affecting  personal liability do not abrogate a director's
fiduciary  duty to the  Company and its  shareholders,  but  eliminate  personal
liability for monetary  damages for breach of that duty.  The provisions do not,
however,  eliminate  or limit the  liability of a director for failing to act in
good faith, for engaging in intentional misconduct or knowingly violating a law,
for authorizing  the illegal  payment of a dividend or repurchase of stock,  for
obtaining an improper  personal  benefit,  for  breaching a  director's  duty of
loyalty  (which  is  generally  described  as  the  duty  not to  engage  in any
transaction  which  involves a conflict  between the interest of the Company and
those of the director) or for  violations of the federal  securities  laws.  The
provisions  also limit or indemnify  against  liability  resulting  from grossly
negligent  decisions  including grossly negligent business decisions relating to
attempts to change control of the Company.

      The provisions  regarding  indemnification  provide, in essence,  that the
Company will  indemnify  its directors  against  expenses  (including  attorneys
fees),  judgments,  fines and amounts paid in settlement actually and reasonably
incurred in connection  with any action,  suit or proceeding  arising out of the
director's status as a director of the Company,  including actions brought by or
on behalf of the Company (shareholder derivative actions). The provisions do not
require a showing of good faith. Moreover,  they do not provide  indemnification
for liability  arising out of willful  misconduct,  fraud,  or  dishonesty,  for
"short-swing"  profits  violations under the federal securities laws, or for the
receipt  of  illegal   remuneration.   The   provisions   also  do  not  provide
indemnification  for any  liability  to the extent such  liability is covered by
insurance.  One purpose of the provisions is to supplement the coverage provided
by such insurance.
<PAGE>
      The  provisions  diminish  the  potential  rights  of action  which  might
otherwise be available to shareholders by limiting the liability of officers and
directors to the maximum  extent  allowable  under Delaware law and by affording
indemnification  against most damages and settlement  amounts paid by a director
of the Company in connection with any shareholders  derivative action.  However,
the  provisions do not have the effect of limiting the right of a shareholder to
enjoin a director  from taking  actions in breach of his  fiduciary  duty, or to
cause the  Company to rescind  actions  already  taken,  although as a practical
matter courts may be unwilling to grant such equitable remedies in circumstances
in which such actions have already been taken.  If the Company is forced to bear
the costs for  indemnification,  the value of the Company stock may be adversely
affected.   In  the  opinion  of  the   securities   and  Exchange   Commission,
indemnification  for  liabilities  arising under the  Securities  Act of 1933 is
contrary to public policy and, therefore, is unenforceable.

                              CERTAIN TRANSACTIONS

     The Company  has,  from time to time,  borrowed  from or advanced  funds to
Messrs. Dan DelGiorno,  Sr. and Daniel DelGiorno,  Jr. At December 31, 1996, the
loan balance due from these  officers  was  approximately  $682,000.  Effective,
January,  1997, these advances are interest bearing at the rate of 7% per annum.
See Executive  Compensation and Security  Ownership of Certain Beneficial Owners
and Management regarding grants of stock and options to Directors and Officers.

     During  the fourth  quarter of 1996,  the  Company  advanced  approximately
$126,000 to Russell Pellicano. The advance was settled with the Company prior to
year end December 31, 1996, through the transfer of marketable securities to the
Company with a market value of $126,000.

     During the years  ended  December  31, 1996 and 1995,  the Company  paid an
outside  Director,  fees for legal  services  aggregating  $127,000 and $64,000,
respectively.

     During the years  ended  December  31, 1996 and 1995,  the Company  paid an
outside Director consulting fees of $52,000 and $30,000, respectively.

         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth certain information as of January 16, 1998,
with respect to the  beneficial  ownership of the Company's  Common Stock by all
persons known by the Company to be the beneficial  owners of more than 5% of its
outstanding  shares of Common  Stock,  by directors who own Common Stock and all
officers and directors as a group:
<TABLE>
<CAPTION>
                                             Common Stock        % of Outstanding
Name of Beneficial Owner                  Beneficially Owned       Shares (2)
------------------------                   -------------------    ---------------
<S>                                          <C>                      <C>  
Daniel Del Giorno, Sr. (1)(3)(4)             4,155,048                2.83%
Daniel Del Giorno, Jr. (1)(3)(4)(7)          2,755,048                1.88%
Russell Pellicano (1)(5)                       681,000                  *
Jack S. Beige (1) (3)                          419,444                  *
Augustin Medina (1)                            247,635                  *
George Aronson (1)                           1,000,000                  *
Ed Warman(1)(6)                              1,515,000                1.03%
-------
* Less than 1%
<FN>
Footnotes (1) The address of the holder is 80 Orville Drive, Suite 200, Bohemia,
New York 11716. (2) Based upon 146,793,505 shares deemed  outstanding  (includes
outstanding  options owned by above named  parties) as of January 16, 1998. (3)
Includes shares held by his spouse. (4) Includes 680,000 options (exercisable at
$0.50 per share),  and  600,000  options  (exercisable  at $.01).  (5)  Includes
100,000 options  (exercisable at $1.50 per share)., (6) Includes 200,000 options
(exercisable  at $1.50 per share) and 80,000  options  (exercisable  at $.50 per
share; 60,000 of which are vested and 20,000 to vest ratably over one year). (7)
Daniel Del Giorno,  Jr. has majority  control of Tech Marketing Group which owns
174,048 shares.
</FN>
</TABLE>
<PAGE>
                            SELLING SECURITY HOLDERS

      The  registration  statement of which this Prospectus  forms a part covers
the registration of 11,747,318 shares of Common Stock (the "Shares").

      These Shares are being offered by the following persons in the amounts set
forth below.

<TABLE>
<CAPTION>

                                     Common Stock    Common     Common Stk.   Option or    Amt owned      % of outstdg.
                                     Beneficially    Stock    to be offered    Warrant    if all shares    Common Stk
                                        Owned        To Be    upon exercise    Exercise      offered     to be owned if
                                      Prior to      Offered     of options      Price         hereby       all shares
                                      Offering*      Hereby    or warrants                   are sold      offered are      
                                                                                                            sold  (1)
                                     ------------   -------   -------------    --------    ------------   ------------

<S>                                 <C>            <C>          <C>           <C>            <C>           <C>  

Bonefede, Michael                       25,000       25,000                                          0      0.00%
Dominion Capital Fund Ltd.           2,481,159    2,481,159                                          0      0.00%
Dominion Capital Fund Ltd.(2)(3)     1,500,000    1,500,000                                          0      0.00%
Dunnigan, Kevin                        220,000                      220,000     $.38/$.25            0      0.00%
Endeavor Capital Fund (2)(3)           500,000      500,000                                          0      0.00%
Innovative Capital, Inc.               200,000                      200,000          $.50            0      0.00%
Markus, Joseph                         915,000       40,000                                    875,000      0.60%
Nicolaou, Tim                          150,000      150,000                                          0      0.00%
Sovereign Partners LP                4,404,236    2,481,159                                  1,923,077      1.31%
Sovereign Partners LP(2)(3)          2,750,000    2,750,000                                          0      0.00%
Thomas Kernaghan(2)(3)               1,250,000    1,250,000                                          0      0.00%
Warman, Edward*                      1,515,000      150,000                                  1,365,000      0.93%
                                                             
                                    15,910,395   11,327,318         420,000                  4,163,077      2.84%

<FN>
* Includes shares issuable upon exercise of options/warrants

(1) Based on 146,793,505 shares deemed outstanding if all options/warrants being
registered are earned and are exercised.
(2) Includes with others an aggregate of 6,000,000 shares,  all, some or none of
which may become  issuable  pursuant  to  guarantees;  if not so issued,  excess
shares listed herein will be returned to authorized, but unissued status.
(3) In the event additional shares become issuable,  a reverse stock split or an
increase  in the  authorized  capital  will be  necessary  to make  such  shares
available for issuance.  The Company received shareholder  authorization to take
such action at the November 26, 1997 shareholders' meeting.

</FN>
</TABLE>
<PAGE>
      The  securities  offered  hereby may be sold from time to time directly by
the Selling Security  holders.  Alternatively,  the Selling Security holders may
from time to time offer such securities through  broker-dealers acting as agents
for the Selling  Security  holders or to  broker-dealers  who may  purchase  the
Selling  Security  holders  securities as principals  and  thereafter  sell such
securities  from  time to time in the  over-the-counter  market,  in  negotiated
transactions,  or  otherwise.  The  distribution  of  securities  by the Selling
Security holders may be effected in one or more transactions  (which may include
block  transactions by or from the account of the Selling Security holders) that
may take  place on the  over-the-counter  market,  including  ordinary  broker's
transactions,  privately-negotiated transactions, through the writing of options
on the  Selling  Security  holders  securities,  through  sales  to one or  more
broker-dealers for resale of such shares as principals, through a combination of
such methods of sale or otherwise,  at fixed prices, at market prices prevailing
at the time of sale, at prices  related to such  prevailing  market prices or at
negotiated prices. Usual and customary or specifically negotiated brokerage fees
or commissions  may be paid by the Selling  Security  holders in connection with
such sales of  securities.  The  Selling  Security  holders  and  intermediaries
through whom such  securities are sold may be deemed  "underwriters"  within the
meaning  of the Act with  respect to the  securities  offered,  and any  profits
realized or commissions  received might be deemed to be  underwriting  discounts
and  commissions  under  the  Act.  If  the  Selling  Securityholder  sells  its
securities,  or options thereon, pursuant to this Prospectus at a fixed price or
at a negotiated price which is, in either case, other than the prevailing market
price or in a block  transaction  to a purchaser who resells,  or if the Selling
Securityholder pays compensation to a broker-dealer that is other than the usual
and  customary  discounts,  concessions  or  commissions,  or if  there  are any
arrangements  either  individually  or in the aggregate that would  constitute a
distribution of the securities,  a post-effective  amendment to the Registration
Statement of which this Prospectus is a part would need to be filed and declared
effective  by the SEC before such Selling  Securityholder  could make such sale,
pay such compensation or make such a distribution.

      At the time a particular  offer of securities is made by or on behalf of a
Selling Securityholder, to the extent required, a Prospectus will be distributed
which will set forth the  number of shares  being  offered  and the terms of the
offering, including the name or names of any underwriters, dealers or agents, if
any, the purchase price paid by any  underwriter  for shares  purchased from the
Selling Security holders and any discounts,  commissions or concessions  allowed
or reallowed or paid to dealers, and the proposed selling price to the public.

      Under the Securities  Exchange Act of 1934, as amended  ("Exchange  Act"),
and the  regulations  thereunder,  any person engaged in a  distribution  of the
securities  of the Company  offered by this  Prospectus  may not  simultaneously
engage in  market-making  activities  with  respect  to such  securities  of the
Company  during the  applicable  "cooling  off" period  (nine days) prior to the
commencement  of such  distribution.  In  addition,  and  without  limiting  the
foregoing, the Selling Security holders will be subject to applicable provisions
of the Exchange Act and the rules and regulations thereunder,  including without
limitation,  rules 10b-2,  10b-6 and 10b-7, in connection  with  transactions in
such securities, which provisions may limit the timing of purchases and sales of
such securities by the Selling Security holders.

      Sales of securities by the Selling  Security holders or even the potential
of such sales would  likely have an adverse  effect on the market  prices of the
securities  offered  hereby.  As of the date of this  Prospectus,  including the
securities  registered  in this  Registration  Statement  and  the  registration
statements  filed in  regard  to shares or  shares  issuable  upon  exercise  of
options,  and if all such  options and warrants  are  ultimately  earned and are
exercised,  the freely tradeable  securities of the Company (the "public float")
will be approximately 146,793,505 shares of Common Stock.

<PAGE>

                              PLAN OF DISTRIBUTION

      The  securities  offered  hereby may be sold from time to time directly by
the Selling Security  holders.  Alternatively,  the Selling Security holders may
from time to time offer such securities through underwriters, dealers or agents.
The  distribution of securities by the Selling  Security holders may be effected
in one or more transactions that may take place in the over-the-counter  market,
including ordinary broker's transactions,  privately-negotiated  transactions or
through  sales  to one or more  broker-dealers  for  resale  of such  shares  as
principals,  including the Underwriter,  at market prices prevailing at the time
of sale,  at prices  related to such  prevailing  market prices or at negotiated
prices.  Usual  and  customary  or  specifically  negotiated  brokerage  fees or
commissions  maybe paid by the Selling  Security holders in connection with such
sales of securities.  The Selling  Security holders and  intermediaries  through
whom such securities are sold may be deemed "underwriters" within the meaning of
the  Securities  Act with  respect to the  securities  offered,  and any profits
realized or commissions received may be deemed underwriting compensation.

      At the time a particular  offer of securities is made by or on behalf of a
Selling Securityholder, to the extent required, a Prospectus will be distributed
which  will set forth the  number of shares  being  offered  and the term of the
offering, including the name or names of any underwriters, dealers of agents, if
any, the purchase price paid by any  underwriter  for shares  purchased from the
Selling Securityholder and any discounts,  commissions or concessions allowed or
reallowed or paid to dealers, and the proposed selling price to the public.

      Under the Securities  Exchange Act of 1934, as amended  ("Exchange  Act"),
and the  regulations  thereunder,  any person engaged in a  distribution  of the
securities  of the Company  offered by this  Prospectus  may not  simultaneously
engage in  market-making  activities  with  respect  to such  securities  of the
Company  during the  applicable  "cooling  off" period  (nine days) prior to the
commencement  of such  distribution.  In  addition,  and  without  limiting  the
foregoing, the Selling Security holders will be subject to applicable provisions
of the Exchange Act and the rules and regulations thereunder,  including without
limitation,  Rule 10b-6 and  10b-7,  in  connection  with  transactions  in such
securities, which provisions may limit the timing of purchases and sales of such
securities by the Selling Security holders.

                         SHARES ELIGIBLE FOR FUTURE SALE

     As of January 16, 1998, the Company had 133,629,276  shares of Common Stock
outstanding.  Of these shares approximately 109,000,000 shares are in the public
float. The 11,747,318  shares (including those issuable upon exercise of options
or warrants as discussed above) offered for sale in this Prospectus also will be
freely  tradeable  without   restriction  or  further   registration  under  the
Securities Act of 1933, except for any shares purchased by an "affiliate" of the
Company (in general,  a person who has a control  relationship with the Company)
which  will be  subject to certain  limitations  of Rule 144  adopted  under the
Securities Act. In addition, the Company recently registered 9,589,869 shares on
Form S-1/A, 11,754,530 shares on Form S-1 and 11,855,155 shares on Form S-8. The
remaining  shares  are  deemed to be  "restricted  securities,"  as that term is
defined  under  Rule  144  promulgated  under  the  Securities  Act.  See  "Risk
Factors-Shares Eligible for Future Sale".

      In  general,  under  Rule  144 as  currently  in  effect,  subject  to the
satisfaction of certain other  conditions,  a person,  including an affiliate of
the company (or persons whose shares are  aggregated),  who has owned restricted
shares of Common Stock  beneficially  for at least one year is entitled to sell,
within  any  three-month  period,  a number of shares  that does not  exceed the
greater of 1% of the total number of outstanding shares of the same class or the
average  weekly  trading  volume of the Company's  Common Stock on all exchanges
and/or  reported  through  the  automated   quotation  system  of  a  registered
securities  association  during the four  calendar  weeks  preceding the date on
which notice of the sale is filed with the Commission.  Sales under Rule 144 are
also subject to certain manner of sale provisions,  notice  requirements and the
availability of current public  information about the Company.  A person who has
not been an affiliate  of the Company for at least the three months  immediately
preceding the sale and who has beneficially  owned shares of Common Stock for at
least two years is entitled to sell such shares under Rule 144 without regard to
any of the limitations described above.

<PAGE>
     The Company has also recently filed  registration  statements for 9,589,869
shares  on Form  S-1/A,  11,754,530  shares on Form  S-1,  both of which  became
effective  on January  6,  1998,  and  11,855,155  shares on Form S-8 under the
Securities  Act covering  shares of Common Stock reserved for issuance under the
Company's  1993 Stock Plans,  the Outside  Directors  Stock Plan,  various stock
incentive  plans and the 1995 Stock Plan.  The  registration  of the  11,855,155
shares  registered in the Form S-8  automatically  became effective upon filing.
Shares  registered  under such  registration  statements are subject to Rule 144
volume limitations  applicable to Affiliates,  and will be available for sale in
the open market, unless such shares are subject to vesting restrictions with the
Company.

      In addition to the shares being  registered,  a substantial  number of the
shares of restricted  stock  presently  outstanding  including all of the shares
being  registered  herein  have been held at least one year.  Accordingly,  such
shares are eligible for resale  pursuant to Rule 144 at the rates and subject to
the conditions  discussed above, and the sale of any substantial  number of such
shares in the  public  market  including  the  shares  being  registered,  could
adversely affect prevailing market prices following the offering.

                            DESCRIPTION OF SECURITIES

Common Stock

     General.  The Company has  150,000,000  authorized  shares of common stock,
$.0001 par value (the  "Common  Stock"),  133,629,276  of which were  issued and
outstanding  as of  January 16, 1998.  All shares of Common  Stock  currently
outstanding are validly issued,  fully paid and  non-assessable,  and all shares
which  are the  subject  of this  Prospectus,  outstanding  and/or  when  issued
pursuant to a valid  exercise of options or  warrants,  will be validly  issued,
fully paid and non-assessable.  At the shareholders meeting held on November 26,
1997, the Company was authorized to increase the authorized  number of shares of
common  stock to  300,000,000,  and to effect a reverse  stock  split in any one
ratio from 1 for 2, to 1 for 10,  either,  both, or neither of which actions may
be taken in the  discretion  of the Board of  Directors.  The  Company  does not
presently have plans to effect either of the authorized actions, but there is no
assurance  that  either,  both  or  neither  of the  authorized  actions  may be
effected.

      Voting  Rights.  Each share of Common Stock entitles the holder thereof to
one vote, either in person or by proxy, at meetings of shareholders. The holders
are not permitted to vote their shares cumulatively. Accordingly, the holders of
more than fifty  percent  (50%) of the issued and  outstanding  shares of Common
Stock can elect all of the Directors of the Company.
See "Principal Shareholders."

      Dividend  Policy.  All shares of Common Stock are entitled to  participate
ratably in dividends  when and as declared by the  Company's  Board of Directors
out of the funds legally available  therefor.  Any such dividends may be paid in
cash,  property or additional  shares of Common Stock.  The Company has not paid
any dividends since its inception and presently  anticipates  that all earnings,
if any, will be retained for  development of the Company's  business and that no
dividends  on the shares of Common  Stock will be  declared  in the  foreseeable
future.  Any future dividends will be subject to the discretion of the Company's
Board of Directors and will depend upon,  among other things,  future  earnings,
the operating and financial condition of the Company, its capital  requirements,
general business conditions and other pertinent facts. Therefore there can be no
assurance that any dividends on the Common Stock will be paid in the future. See
"Dividend Policy".

      Miscellaneous  Rights  and  Provisions.  Holders  of Common  Stock have no
preemptive  or other  subscription  rights,  conversion  rights,  redemption  or
sinking fund provisions.  In the event of the dissolution,  whether voluntary or
involuntary,  of the  Company,  each share of Common  Stock is entitled to share
ratably in any assets available for distribution to holders of the equity of the
Company after satisfaction of all liabilities.

      The  Delaware  General  Corporation  Law  contains  certain  anti-takeover
provisions.  Section 203 of the Delaware General Corporation Law provides,  with
certain exceptions, that a Delaware corporation may not engage in any of a broad

<PAGE>

range  of  business  combinations  with a  person  who  owns  15% or more of the
corporation's  outstanding  voting  stock (an  "interested  stockholder")  for a
period  of three  years  from the date  that such  person  became an  interested
stockholder  unless:  (i) the  transaction  resulting in a person's  becoming an
interested stockholder,  or the business combination is approved by the board of
directors  of  the   corporation   before  the  person   becomes  an  interested
stockholder;  (ii)  the  interested  stockholder  acquires  85% or  more  of the
outstanding  voting stock of the corporation  (excluding shares owned by persons
who are both  officers  and  directors  of the  corporation,  and shares held by
certain employee stock ownership  plans);  or (iii) the business  combination is
approved by the corporation's  board of directors and by the holders of at least
66 2/3% of the  corporation's  outstanding  voting stock at an annual or special
meeting, excluding shares owned by the interested stockholder.

Transfer Agent and Registrar

     The  transfer  agent  and  registrar  for the  Company's  Common  Stock  is
Manhattan Transfer Registrar Company, P. O. Box 361, Holbrook, New York 11741.

                                  LEGAL MATTERS

     The  validity of the  issuance  of the  securities  offered  hereby will be
passed  upon for the  Company  by the law firm of  Daniel B.  Kinsey,  P. C. Mr.
Kinsey  owns  1,870,000  shares of  Common  Stock and  options  exercisable  for
1,354,667 shares.

                                     EXPERTS

      The audited  financial  statements  of the Company as of December 31, 1995
and 1996, and for each of the three years in the period then ended, are included
herein and in the  registration  statement in reliance upon the report of Hays &
Company,  independent certified public accountants,  appearing elsewhere herein,
and upon the authority of said firm as experts in accounting and auditing.

                             ADDITIONAL INFORMATION

      The Company has filed with the  Securities  and Exchange  Commission  (the
"Commission")  a Registration  Statement on Form S-1 under the Securities Act of
1933, as amended,  with respect to the Common Stock.  This  Prospectus  does not
contain all of the information set forth in the Registration Statement,  certain
parts of which are omitted in accordance  with the rules and  regulations of the
Commission.  For further information with respect to the Company and such Common
Stock,  reference  is made to the  Registration  Statement  and the exhibits and
schedules  filed  therewith.  Statements  contained in this Prospectus as to the
contents  of  any  contract  or  other  document  filed  as an  exhibit  to  the
Registration  Statement  are not  necessarily  complete,  and in each  instance,
reference is made to the copy of such  contract or document  filed as an exhibit
to the Registration Statement, each statement being qualified in all respects by
such reference. The Registration Statement, including the exhibits and schedules
filed therewith,  may be inspected without charge at the Commission's  principal
offices  at 450 Fifth  Street,  N.W.  Washington,  D.C.  20549 and its  Regional
Offices located at Northwestern  Atrium Center,  500 West Madison Street,  Suite
1400,  Chicago,  Illinois 60661,  and Seven World Trade Center,  13th Floor, New
York,  New York 19948.  Copies of such  materials  may be obtained  upon written
request from the Public Reference  Section of the Commission,  450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates.

<PAGE>



                          INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

                                                                            Page
                                                                            ----

<S>                                                                          <C>
Report of Independent Certified Public Accountants .......................   F-1
Consolidated Balance Sheets as of December 31, 1996 and 1995 .............   F-2
Consolidated Statements of Operations for the
     years ended December 31, 1996, 1995 and 1994  .......................   F-3
Consolidated Statement of Shareholders' Equity for the
      years ended December 31, 1994, 1995 and 1996 .......................   F-4
Consolidated Statements of Cash Flows for the years ended
     December 31, 1996, 1995 and 1994  ...................................   F-5
Notes to Consolidated Financial Statements ...............................   F-6
Condensed Consolidated Balance Sheets as of September 30, 1997
     and December 31, 1996 (unaudited) ...................................   FQ-1
Condensed Consolidated Statements of Operations for the
     Nine Months ended September 30, 1997 and 1996 (unaudited) ...........   FQ-2
Condensed Consolidated Statements of Cash Flows for the Nine Months
     ended September 30, 1997 and 1996 (unaudited) .......................   FQ-3
Notes to Condensed Consolidated Financial Statements (unaudited) .........   FQ-4
</TABLE>

<PAGE>
















                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES

                       CONSOLIDATED FINANCIAL STATEMENTS

                  YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994













                                     
<PAGE>




<TABLE>
<CAPTION>
                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES

                       CONSOLIDATED FINANCIAL STATEMENTS

                  YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994


                                    CONTENTS
                                                                              Page
                                                                              ----


<S>                                                                            <C>
Independent Auditor's Report ................................................. 1  

Consolidated Balance Sheets
December 31, 1996 and 1995 .................................................   2

Consolidated Statements of Operations
Years Ended December 31, 1996, 1995 and 1994 ...............................   3

Consolidated  Statement of Shareholders'  Equity
Years Ended December 31, 1994, 1995 and 1996 ...............................   4

Consolidated Statements of Cash Flows
Years Ended December 31, 1996, 1995 and 1994 ...............................   5

Notes To Consolidated Financial Statements .................................   6-28
</TABLE>

<PAGE>
Board of Directors and Shareholders
Computer Concepts Corp.
Bohemia, New York


                          INDEPENDENT AUDITOR'S REPORT

We have  audited  the  accompanying  consolidated  balance  sheets  of  Computer
Concepts  Corp.  and  subsidiaries  (the  "Company") as of December 31, 1996 and
1995,  and the related  consolidated  statements  of  operations,  shareholders'
equity and cash flows for each of the three years in the period  ended  December
31, 1996.  These financial  statements are the  responsibility  of the Company's
management.  Our  responsibility  is to express  an  opinion on these  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 financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the consolidated financial position of Computer Concepts
Corp. and  subsidiaries  as of December 31, 1996 and 1995, and the  consolidated
results of their  operations and their  consolidated  cash flows for each of the
three years in the period ended  December 31, 1996 in conformity  with generally
accepted accounting principles.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern.  As shown in the consolidated
financial  statements,  the Company continued to sustain  significant losses and
use substantial amounts of cash in operations during the year ended December 31,
1996.  These factors,  among others,  as discussed in Note 1 to the consolidated
financial  statements,  raise  substantial  doubt about the Company's ability to
continue as a going concern.  Management's  plans in regard to these matters are
also  described  in  Note  1.  The  financial  statements  do  not  include  any
adjustments that might result from the outcome of this uncertainty.


/s/Hays & Company

Hays & Company
October 23, 1997, except for Note 12
which is dated November 26, 1997
New York, New York
<PAGE>


                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)

<TABLE>
<CAPTION>
                                                                     December 31,
                                                                 -------------------
ASSETS                                                           1996           1995
                                                                 ----           ----     
 CURRENT ASSETS

<S>                                                             <C>            <C>   
Cash and cash equivalents.....................................  $ 5,675        $  579
Accounts receivable, net of allowance for doubtful
      accounts of $693 and $539 in 1996 and 1995, respectively.   9,044         4,475
Advances to officers...........................................     682           385
Inventories....................................................      29           123
Prepaid expenses and other current assets......................   1,036           431
                                                                -------       -------           
                                                                 16,466         5,993

INSTALLMENT ACCOUNTS RECEIVABLE, due after one year............   3,714           -

PROPERTY AND EQUIPMENT, net....................................   1,605         1,579

SOFTWARE COSTS, net (including $450  held for sale in 1995)....     949         2,950

EXCESS OF COST OVER FAIR VALUE OF NET ASSETS ACQUIRED,
    net of accumulated amortization of $2,628 and $1,369 in 1996 
    and 1995, respectively......................................  4,683         5,425

OTHER ASSETS ...................................................    254           134
                                                                -------       -------           
                                                                $27,671       $16,081
                                                                =======       ========        
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

   Accounts payable and accrued expenses........................ $4,227        $4,047
   Current portion of long-term debt............................    458           359
   Deferred revenues............................................  8,972         4,585
                                                                -------       -------           
                                                                 13,657         8,991

DEFERRED REVENUES ..............................................  3,964           281

LONG-TERM DEBT..................................................    526           800

COMMON STOCK SUBJECT TO REDEMPTION..............................     -          4,000
                                                                 ------       -------
                                                                 18,147        14,072
                                                                 ------       -------
COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
   Common stock, $.0001 par value; 150,000,000 shares authorized; 
   101,335,000 shares in 1996 and 57,475,000 shares in 1995 
   issued and outstanding.......................................     10             6
   Additional paid-in capital................................... 78,870        52,406
   Accumulated deficit..........................................(69,356)      (50,403)
                                                                -------       -------           
        Total shareholders'  equity.............................  9,524         2,009
                                                                -------       -------
                                                                $27,671       $16,081
                                                                =======       =======
The accompanying notes are an integral part of
 these consolidated financial statements.

                                      
</TABLE>

<PAGE>

                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (in thousands, except per share data)

<TABLE>
<CAPTION>
                                                               Year ended December 31,
                                                        ------------------------------------
                                                         1996            1995           1994
                                                         ----            ----           ----

<S>                                                    <C>            <C>           <C>  
REVENUES:
   Software licenses and support...................    $19,030        $16,302        $13,695
                                                       -------        -------        -------
COSTS AND EXPENSES:
   Cost of revenues and technical support..........      5,944          7,074          5,537
   Sales and marketing.............................     13,038          9,166          5,850
   General and administrative......................      8,009          8,191          7,936
   Amortization and depreciation...................      3,684          4,104          2,452
   Research and development........................      1,496          1,270            521
   Unusual charges.................................      2,590          1,102          3,178
   Reduction in carrying values of  long-lived 
     assets........................................        412          3,760            -
                                                       -------        -------        -------             
                                                        35,173         34,667         25,474
                                                       -------        -------        -------             
OPERATING LOSS.....................................    (16,143)       (18,365)       (11,779)
                                                       -------        -------        -------             

OTHER INCOME/(EXPENSE):

   Losses on securities............................        -              -            (428)
   Interest charge pertaining to discount on 
      convertible debentures.......................     (2,810)           -             -
                                                       -------       --------       --------             
NET LOSS...........................................   $(18,953)      $(18,365)      $(12,207)     
                                                       =======       ========       ========             
NET LOSS PER SHARE.................................     $(0.27)        $(0.37)      $(0.51)
                                                       =======       ========       ========             

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING ........     71,301         49,211         24,110
                                                       =======       ========       ========             

The accompanying notes are an integral part of
 these consolidated financial statements.

                                    
</TABLE>
<PAGE>




                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                  Years ended December 31, 1994, 1995 and 1996
                                 (in thousands)

<TABLE>
<CAPTION>
                                                    Additional                   Currency      Total
                                 Common Stock       Paid-in      Accumulated     Translation   Shareholders'
                              Shares      Amount    Capital      Deficit         Adjustment    Equity
                              ------      ------    -----------  -----------     ------------  ------------- 

<S>                           <C>          <C>        <C>         <C>               <C>          <C>
BALANCE, JANUARY 1, 1994      20,690        $2       $31,997       $(19,831)       $ -          $12,168

Net proceeds from sales of
  common stock                 5,189        --         2,411           --           --            2,411
Common stock and options
  issued for services            375        --         1,011           --           --            1,011
Stock issued for business and
  asset acquisitions           7,979         1         4,476           --           --            4,477
Currency translation
  adjustment                    --          --          --             --           (21)            (21)
Net loss                        --          --          --          (12,207)        --          (12,207)
                              ------    ------        ------        -------      -------        ------- 
  BALANCE, DECEMBER 31, 1994  34,233         3        39,895        (32,038)        (21)          7,839

Net proceeds from sales of
  common stock                20,886         3         8,864           --           --            8,867
Common stock and options
  issued for services          2,137        --         3,234           --           --            3,234
Common stock and options
  issued for settlement of
  trade payables                 219        --           413           --           --              413
Currency  translation
  adjustment                    --          --          --             --            21              21
Net loss                        --          --          --          (18,365)        --          (18,365)
                              ------    ------        ------        -------      -------        ------- 
BALANCE, DECEMBER 31, 1995    57,475         6        52,406        (50,403)        --            2,009


Net proceeds from sales of 
  common stock and options 
  exercised                    6,365         1         1,996           --           --            1,997
Common stock and options issued
  for services                 7,680         1         3,445           --           --            3,446
Common stock issued subject
   to forfeiture               5,075        --         1,508           --           --            1,508
Conversion of common stock
   formerly subject to
   redemption                  4,490        --         4,000           --           --            4,000
Conversion of convertible
   debentures                 16,632         2        12,739           --           --           12,741
Common stock issued for
   settlements                 3,618        --         2,776           --           --            2,776
Net loss                        --          --          --          (18,953)        --          (18,953)
                             -------    ------       -------       --------     -------        --------
BALANCE, DECEMBER 31,1996    101,335       $10       $78,870       $(69,356)       $--         $  9,524
                             =======    ======       =======       ========     =======        ========

The accompanying notes are an integral part of
 these consolidated financial statements.        
</TABLE>

<PAGE>

                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                       Year ended December 31,
                                                                  -------------------------------
                                                                  1996         1995         1994
                                                                  ----         ----         ----    
<S>                                                             <C>          <C>         <C>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                         $(18,953)   $(18,365)   $(12,207)
Adjustments to reconcile net loss to net cash used in
  operating activities:
  Amortization and depreciation:
      Property and equipment                                          806         672         599
      Software costs                                                1,910       1,924       1,276
      Excess of cost over fair value of net assets acquired           959       1,480         577
      Other                                                             9          28        --
      Non-cash interest charge for discount on convertible debt     2,810        --          --
  Provision for doubtful accounts                                     154           7         400
  Common stock and options issued for services                      3,446       3,234       1,011
  Common stock issued subject to forfeiture                         1,508        --          --
  Non-cash unusual charges                                          2,415         269       3,178
  Reduction in carrying values of
      long-lived assets                                               412       3,760        --
  Loss on investment in securities                                   --          --           428
  Changes in operating assets and liabilities, net of 
         effect of acquisitions:
      Accounts receivable                                          (4,723)       (802)     (1,924)
      Inventories                                                      94          91        (146)
      Prepaid expenses and other current assets                      (637)        174         (83)
      Installment accounts receivable                              (3,714)       --          --
      Other assets                                                   (129)         39         111
      Accounts payable and  accrued expenses                          569        (998)      1,408
      Deferred revenues                                             8,070       1,036      (1,807)
                                                                   ------      ------      ------
   Net cash used in  operating activities                          (4,994)     (7,451)     (7,179)
                                                                   ------      ------      ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures                                                 (832)       (547)     (1,541)
Software development and technology purchases                        (526)       (545)        (75)
Proceeds from sale of technology                                      450        --          --
Net change in advances to officers                                   (297)       (271)        232
Capitalization of  software development costs                        --          --           (96)
Net investments in marketable securities                             --          --         2,165
Acquisition of DBopen, net of  cash acquired                         --          --          (207)
Additional consideration for MapLinx acquisition                       56        --          --
Additional consideration  for  Softworks  acquisition                (515)       (320)       --
                                                                   ------      ------      ------
   Net cash (used in) provided by investing activities             (1,664)     (1,683)        478
                                                                   ------      ------      ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from sales of common  stock and options                1,997       8,867       2,411
Net proceeds from sale of convertible debentures                    9,931        --          --
Net change in long-term debt                                         (174)        345         150
Repayment of loans payable to shareholders, net                       --         --          (193)
                                                                   ------      ------      ------
   Net cash provided by financing activities                       11,754       9,212       2,368
                                                                   ------      ------      ------
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS                5,096          78      (4,333)
CASH AND CASH EQUIVALENTS, beginning of year                          579         501       4,834
                                                                   ------      ------      ------
CASH AND CASH EQUIVALENTS, end of year                             $5,675      $  579      $  501
                                                                   ======      ======      ======
The accompanying notes are an integral part of
 these consolidated financial statements.   
                                      
</TABLE>

<PAGE>

                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994


1.   BASIS OF PRESENTATION

     Computer Concepts Corp. and subsidiaries (the "Company")  design,  develop,
market and support  information  delivery software products,  including end-user
data access tools for use in personal  computer and  client/server  environments
and systems management  software products for corporate  mainframe data centers.
The Company has recently entered into the technology infrastructure construction
business  whereby for a fee the Company assists in the design,  construction and
installation of building technology  systems.  The Company's principal market is
the United States. Export revenue is principally made to European distributors.

     The  Company  has  incurred   consolidated   net  losses  of   $18,953,000,
$18,365,000 and  $12,207,000  during the years ended December 31, 1996, 1995 and
1994,  respectively,  and cumulative net losses of $69,356,000  through December
31,  1996.  For the year ended  December  31,  1996,  net cash used in operating
activities was $4,994,000, reflecting the above net loss being offset by various
non-cash  items  described in the  accompanying  consolidated  statement of cash
flows. The Company's cash requirements were primarily  financed through the sale
of  convertible  debentures  and common  stock and  exercises  of stock  options
approximating $11,928,000 for the year ended December 31, 1996. The Company does
not maintain a credit facility with any financial  institution.  The Company has
continued to incur  significant  expenses  with respect to the  development  and
marketing  of  its  d.b.Express   product   technology  without  generating  any
significant  revenue.  As a result of  continued  operating  losses,  the use of
significant  cash in operations and the lack of sufficient  funds to execute its
business  plan,  among  other  matters,  there is  substantial  doubt  about the
Company's ability to continue as a going concern.  No adjustments have been made
with respect to the consolidated  financial  statements to record the results of
the ultimate outcome of this uncertainty.

     Management's  plans to remain a going concern,  as more fully  described in
these notes,  require  additional  financing  until such time as sufficient cash
flows are generated from operations.  This financing is anticipated to be in the
form of additional equity and/or  convertible  debenture  investments,  however,
there can be no assurances that the Company will be able to obtain sufficient


                                    
<PAGE>
                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994


1.   BASIS OF PRESENTATION (continued)

financing  to  execute  its  business  plan.  The  Company's  current  source of
operating  revenue  continues  to be derived from its  wholly-owned  subsidiary,
Softworks, Inc. ("Softworks"). Management's plans to remain a going concern rely
upon achieving  positive cash flows from operations through the continued growth
of  Softworks  and the  successful  exploitation  of the  Company's  d.b.Express
product.  While to  date,  revenue  from  d.b.Express  has  been  insignificant,
management  believes that its  proprietary  software  technology has significant
potential in several areas,  and solves certain  significant  business issues in
the  telecommunications  and internet related  markets.  In order to realize the
potential  of this  product,  management  will need to  aggressively  pursue all
marketing  opportunities.  To date, the Company has incurred  significant losses
(both cash  expenses  and  non-cash  expenses as  described in these notes) as a
result  of  the  development  and  marketing  of  d.b.Express.  There  can be no
assurances that the Company will be successful in achieving  positive cash flows
from operations with respect to the d.b.Express  product.  The Company continues
to pursue license and development agreements with various companies.  While none
of the Company's existing agreements or development  opportunities,  that relate
to  d.b.Express,  provide  sales  commitments,   management  believes  that  the
successful exploitation of its d.b.Express technology,  as well as the continued
growth of Softworks, will eventually enable the Company to achieve positive cash
flows from operations.  Unless the Company determines to discontinue its pursuit
of d.b.Express revenue (which requires  significant  financial  resources),  the
Company will need to generate  positive cash flows from operations from the sale
of  d.b.Express  product in order to decrease its  dependency on cash flows from
financing activities and remain a going concern. The Company is currently in the
process of negotiating the sale of convertible securities for an amount that the
Company believes will sustain its operations through April 1998; however,  there
can be no assurance  that the Company will be successful in these  efforts.  See
Note 12 - "Subsequent events" for updated information.

The Company is a defendant in several lawsuits,  including a class action claim,
as  described  in Note 11,  Legal  Matters.  Based on  consultation  with  legal
counsel,  the Company and its officers believe that  meritorious  defenses exist
regarding the lawsuits and claims and they are vigorously  defending against the
allegations.  The  Company is unable to predict  the  ultimate  outcome of these
claims, which could have a material adverse affect on the consolidated financial
position and results of  operations of the Company.  Accordingly,  the financial
statements  do not reflect any  adjustments  that might result from the ultimate
outcome of these litigation matters.

                                
<PAGE>
                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

2.   SIGNIFICANT ACCOUNTING POLICIES

   Principles of Consolidation

   The  consolidated  financial  statements  include  the  accounts  of Computer
Concepts Corp. and its wholly-owned  subsidiaries.  All significant intercompany
transactions and balances have been eliminated in consolidation.

   Revenue Recognition

     License  revenue is  recognized  at the time of delivery and  acceptance of
software  products,  where  collectibility  is generally  deemed probable and no
significant\insignificant  obligations exist. Where realization of sale proceeds
is not deemed probable,  license revenue is recognized on the installment (cash)
method  following  delivery.  Maintenance  revenue is  deferred  and  recognized
ratably over the maintenance period.  Consulting fees are recognized as services
are performed.

   Installment Accounts Receivable

   Perpetual license agreements may be executed under installment  payment terms
with monthly, quarterly or annual payment terms for up to five years. Revenue is
deferred and recognized over the period of the installment payment plan.

   Property and Equipment

   Property and equipment are stated at cost and  depreciated on a straight-line
basis  over  the  estimated  useful  lives  of  the  related  assets.  Leasehold
improvements  are  amortized  over the  lives of the  respective  leases  or the
service lives of the related  assets,  whichever is shorter.  Capitalized  lease
assets are  amortized  over the shorter of the lease term or the service life of
the related assets.

   Software Costs

     Costs  associated with the  development of software  products are generally
capitalized once  technological  feasibility is established.  Purchased software
technologies are recorded at cost and software technologies acquired in purchase
business  transactions  are recorded at estimated  fair value.  Amortization  of
software  costs begins when  products  become  available  for customer  release.
Purchased  software  technologies  and software costs  associated with the basic
technology development are amortized on a straight-line basis over the estimated
economic  lives  of  the  products,  generally  five  years.  Development  costs
associated  with specific  versions of software are amortized over the estimated
life of the version,  generally 12 to 24 months.  Management  evaluates  whether
these intangible assets are impaired (and appropriately adjusts carrying values)
by comparing the net carrying  value of the asset to the  undiscounted  expected
future cash flows to be generated by the asset.

                                      
<PAGE>
                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

2.   SIGNIFICANT ACCOUNTING POLICIES (Continued)

   Excess of Cost Over Fair Value of Net Assets Acquired

   The  excess of cost over the fair value of net assets  acquired  in  purchase
business transactions is amortized on a straight-line basis over periods ranging
from three to ten years. Impairment of the excess of cost over fair value of net
assets acquired is evaluated by comparing the estimated future undiscounted cash
flows from the related assets of the acquired business to the carrying amount of
such assets.

   It is the Company's policy to periodically  review and evaluate whether there
has been a  permanent  impairment  in the value of  intangibles  and  adjust the
carrying value accordingly.  Factors considered in the valuation include current
operating results, trends and anticipated undiscounted future cash flows.

  Income Taxes

  Deferred tax assets and  liabilities  are recognized  based on the differences
between the financial and tax bases of assets and liabilities  using enacted tax
rates in effect for the year in which  differences are expected to reverse.  The
Company  has  recorded  no  provisions  for  income  taxes  in the  accompanying
consolidated financial statements as a result of incurred losses.

   Net Loss Per Share

   Net loss per share is based on the weighted  average  number of common shares
outstanding.  Outstanding  stock  options,  warrants and other  potential  stock
issuances have not been considered in the computation  since the effect of their
inclusion would be antidilutive.

   Segment Information

     The Company is engaged in only one business segment,  operating principally
in North America,  during the years 1994 through 1996.  Domestic export revenue,
made principally to European distributors, is summarized as follows:
  
                                    
<PAGE>
                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

2.   SIGNIFICANT ACCOUNTING POLICIES (continued)

<TABLE>
<CAPTION>
                              Year ended December 31,
------------------------------------------------------------
                         1996            1995           1994
                         ----            ----           ----

<S>                   <C>            <C>            <C>       
Germany               $1,697,000     $1,361,000     $1,088,000
United Kingdom           881,000        528,000        367,000
Canada                   304,000        282,000        309,000
Australia                278,000        113,000         54,000
Japan                    234,000        274,000        269,000
Other Locations          610,000        174,000        344,000
                      ----------     ----------     ----------
                      $4,004,000     $2,732,000     $2,431,000
                      ==========     ==========     ==========
</TABLE>
   Cash and Cash Equivalents

  The Company considers all investments with original maturities of three months
or  less  to  be  cash  equivalents.  The  carrying  amount  of  temporary  cash
investments  approximates  the fair value because of the short maturity of those
instruments.

   Use of Estimates

   In preparing  consolidated  financial statements in conformity with generally
accepted accounting principles,  management makes estimates and assumptions that
affect the  reported  amounts  of assets  and  liabilities  and  disclosures  of
contingent  assets and  liabilities  at the date of the  consolidated  financial
statements,  as well as the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.

3.   ACQUISITIONS

   Softworks, Inc.

     In October 1993, the Company completed the acquisition of all of the common
stock of Softworks, a privately held Maryland company founded in 1977, providing
systems management software products.

The purchase price approximated  $5,700,000,  which included  $2,000,000 in cash
and 1,000,000 shares of the Company's restricted common stock, 500,000 shares of
which were  contingently  issuable upon  realizing  certain 1993 revenue  goals.
These goals were achieved and the shares were issued.  The  acquisition has been
accounted for using the purchase method of accounting.  Accordingly,  assets and
liabilities  were  recorded at their fair values as of  September  1, 1993,  the
effective  date of the  acquisition,  and the  operations of Softworks have been
included in the Company's consolidated statements of operations since that date.
The excess of cost over the fair value of net assets acquired,  which originally
approximated  $5,484,000,  is being amortized over ten years. The agreement also
requires the Company to make additional contingent purchase consideration


                                      
<PAGE>
                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

 3.   ACQUISITIONS (continued)

   Softworks, Inc. (continued)

payments to two of Softworks'  former  shareholders  based upon certain  product
revenue for the years 1995 through 1998, up to a maximum of $1,000,000 each, for
an aggregate  maximum of $2,000,000.  Through December 31, 1996, the Company has
incurred  a  liability  of  $924,000,  ($802,000  of  which  was  paid)  to  the
non-employee  former   shareholders,   which  has  been  treated  as  additional
consideration in connection with the acquisition and,  accordingly,  included in
the  excess  of cost  over  the  fair  value of net  assets  acquired,  as these
individuals did not continue in the employment of the Company  subsequent to the
acquisition. No other contingent payments have been made under the terms of this
agreement.

  Superbase

  In June 1994,  the Company  completed  the purchase of the  Superbase  product
technology  and certain  related  assets from  Software  Publishing  Corporation
("SPC") in exchange  for  2,031,175  shares of the  Company's  restricted  stock
valued at approximately $4,000,000 and $75,000 in cash. SPC received a valuation
guarantee  for the stock  issued,  and was  permitted  to sell such  stock in an
orderly  manner over a twelve month  period  following  registration,  which was
originally  required to be completed  before  December 31, 1994.  The  agreement
provided  that should such  registration  statement not be effective by December
31, 1994, SPC, at its option, could require the Company to repurchase the shares
issued for the amount of the valuation guarantee.

On January 19, 1995,  SPC and the Company  entered  into an extension  agreement
whereby the Company was given an extension to file the registration statement to
February 15, 1995. In exchange for that extension, the Company agreed to pay SPC
$560,000  (the  "Penalty  Amount"),  payable  $300,000 in cash in three  monthly
installments  ($100,000 was paid in 1995 and $200,000 was paid in October 1996),
and $260,000 in  additional  shares of Company  common stock.  These  additional
shares also had a valuation  guarantee.  As a result of the Company's failure to
meet the December 31, 1994 registration  statement filing deadline,  the Company
recorded the Penalty Amount,  $560,000, as an unusual charge in the December 31,
1994 consolidated  statement of operations.  The extension  agreement included a
provision that if the Company did not meet the February 15, 1995  deadline,  and
the  registration  was not completed by May 31, 1995, SPC was entitled to either
of the following  (at SPC's  option):  (i) the payment of an additional  penalty
payment equal to $638,400  payable  equally in cash and Company common stock, or
(ii) the repurchase of the shares as provided for in the agreement.  The Company
did not meet the May 31, 1995 requirement and SPC decided to receive the penalty
equally  in  cash  and  stock.  Accordingly,  the  The  Company  accrued  for an
additional penalty payment of $638,400 as an unusual charge in 1995.

In October  1996,  the Company and SPC signed a  Settlement  and Mutual  Release
Agreement.  This  agreement  permitted SPC to accelerate its ability to sell its
remaining shares, with the Company paying $619,420 in cash ($200,000 of the cash
portion of the Penalty Amount,  $319,200 of the May 31, 1995 additional  penalty
amount,  and $100,220 of related  interest  expense)  and issuing an  additional
309,000  shares  of the  Company's  common  stock,  which  were  fair  valued at
$183,000, to settle all claims between the parties. The Company recorded a


                                      
<PAGE>
                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

 3.   ACQUISITIONS (continued)

  Superbase (continued)

total charge of $515,000 in 1996, reflecting such final settlement. During 1996,
the Company issued 5,393,000 shares of its common stock (consisting of 4,490,000
shares upon the redemption  conversion and 903,000 shares  relating to penalties
and the final settlement)  ending its commitments under the SPC agreements.  The
stock originally issued to SPC was included in the accompanying balance sheet as
"Common Stock Subject to  Redemption"  which was classified as debt in the event
the Company would have been required to repurchase  the shares at the guaranteed
price.  This amount has been  reclassified to equity as the ultimate  resolution
did not require the Company to repurchase the shares.

   During  the year  ended  December  31,  1995,  as a result  of the  Company's
decision to not invest in the further development and marketing of the Company's
Superbase  software  technology,  the Company recorded a charge to operations of
$2,440,000.  This reduced the carrying  value of this asset to $450,000.  During
1996,  the Company sold the  underlying  software  technology,  with the Company
realizing the cash proceeds of $450,000.

   MapLinx, Inc.

During  December  1994,  the Company  completed the  acquisition of MapLinx Inc.
("MapLinx"),  a developer and provider of personal computer database  geographic
utilities used with Windows  database and  spreadsheet  products.  In connection
with the acquisition, the Company issued 1,672,476 shares having a fair value of
$900,000 at the  acquisition  date. The  acquisition has been accounted for as a
purchase and, accordingly, assets acquired and liabilities assumed were recorded
at their fair values as of December 31, 1994 and the operations of MapLinx,  are
included in the Company's consolidated statements of operations since that date.
The cost of the  acquisition  exceeded the fair value of net assets  acquired by
$904,000 and has been  classified  as the "excess of cost over fair value of net
assets  acquired" and was being amortized on a straight line basis over a period
of three years.

Since its  acquisition,  MapLinx'  revenues had  diminished  and it had incurred
continuing  losses. As a result, the Company had evaluated the carrying value of
the  unamortized  portion of the  MapLinx  excess of cost over fair value of net
assets acquired and unamortized software development costs, aggregating $412,000
at December 31, 1996, and had determined that its  recoverability  was doubtful.
Accordingly,  the Company wrote-off such long-lived assets in the fourth quarter
of 1996.  The Company is in the process of  attempting to sell the net assets of
MapLinx.  There can be no assurances  that the Company will be successful in its
attempt to sell the net assets of MapLinx.

See Note 12 - "Subsequent events" for updated information.
                                   
<PAGE>
                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

 3.   ACQUISITIONS (continued)

   MapLinx, Inc. (continued)

Financial  information  pertaining  to  MapLinx  as of and for the  years  ended
December 31,1996, and 1995, are summarized below:

<TABLE>
<CAPTION>
                                     1996                1995
                                     ----                ----
   
<S>                                <C>                 <C>     
Current Assets                     $366,000            $831,000
Total Assets                        429,000           1,520,000
Current Liabilities                 517,000             729,000
Total Liabilities                   520,000             743,000
Net Revenues                      2,220,000           3,780,000
Net (Loss)                       (1,497,000)           (508,000)

</TABLE>


     DBopen, Inc.

     During  October  1994,  the Company  entered  into an  agreement to acquire
Dbopen, Inc. ("DBopen"), a provider of personal computer database administration
tools employing  client/server  technology.  In connection with the acquisition,
the Company  issued  $939,300 of restricted  common stock and assumed  long-term
debt of approximately  $423,000.The  agreement provided for a price guarantee on
the initial  stock  issuance and the issuance of  additional  restricted  common
stock upon the timely  completion  of certain new products as well as payment of
additional consideration over a four-year period based on the revenue and profit
contribution  of DBopen.  The  acquisition  has been accounted for as a purchase
and,  accordingly,  Dbopen's assets and liabilities  were recorded at their fair
values as of December 31, 1994 and the  operations of DBopen are included in the
Company's  consolidated statement of operations since that date. The cost of the
acquisition  exceeded the fair value of net assets acquired by $1,916,000  which
has been  classified  as the  "excess  of cost  over  fair  value of net  assets
acquired" at December 31, 1994 and is being amortized on the straight line basis
over a period of three  years.  The  historical  operations  of  DBopen  are not
material to the historical operations of the Company.

  In  the  third  quarter  of  1995,  certain  new  products  pertaining  to the
acquisition  of DBopen  were  introduced  into the  marketplace.  As a result of
limited sales and changing market  conditions during the fourth quarter of 1995,
it became apparent that  significant  additional  expenditures  would have to be
incurred  in order to modify the DBopen  products to meet such  changing  market
conditions. In the opinion of management, such additional costs would exceed the
projected  benefits  and the  decision  was made to  discontinue  the  products.
Consistent  with this  business  decision,  the Company  wrote-off the remaining
carrying  value of its  investment in Dbopen of $1,320,000 in the fourth quarter
of 1995.

                                      
<PAGE>
                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994


4.  PROPERTY AND EQUIPMENT
    Property and equipment consist of the following: 
<TABLE>
<CAPTION>                     
                                                                      December 31,
                                                                   -------------------                           
                                                  Useful life
                                                   in years         1996          1995
                                                  -----------      -----        ------
                                                                      (in thousands)

<S>                                                <C>             <C>         <C>    
      Computer equipment and software              3 to 7          $2,807      $ 2,019
      Furniture and fixtures                       5 to 7             279          250
      Leasehold improvements                       7                  473          458
                                                                  -------      ------- 
                                                                    3,559        2,727
      Less accumulated depreciation
          and amortization                                        ( 1,954)     ( 1,148)
                                                                  -------      -------  
                                                                  $ 1,605      $ 1,579
                                                                  =======      =======    
</TABLE>

5.   SOFTWARE COSTS
     Software costs consists of the following:

<TABLE>
<CAPTION>
                                                            December 31,
                                                         -------------------
                                                         1996           1995
                                                         ----           ----    
                                                             (in thousands)
<S>                                                     <C>            <C>   
Capitalized software development costs                  $3,538         $3,303
Purchased and acquired software technologies
  (including $450  held for sale in 1995)                1,894          2,220
                                                        ------         ------          
                                                         5,432          5,523
Less accumulated amortization                           (4,483)        (2,573)
                                                        ------         ------
                                                        $  949         $2,950
                                                        ======         ======
</TABLE>
   
6.   ACCOUNTS PAYABLE AND ACCRUED EXPENSES
     Accounts payable and accrued expenses consist of the following:
<TABLE>
<CAPTION>
                                                             December 31,
                                                         --------------------
                                                         1996            1995
                                                         ----            -----
                                                             (in thousands)
<S>                                                      <C>            <C>   
       Accounts payable                                  $1,253         $1,909
       Due to SPC (Note 3.b)                                -              838
       Accrued payroll and benefits                         616            675
       Other accrued expenses                             2,358            625
                                                         ------         ------   
                                                         $4,227         $4,047
                                                         ======         ======    
</TABLE>
<PAGE>
                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

7.   SHAREHOLDERS' EQUITY

     See Note 12 - "Subsequent  events" for updated  information with respect to
shareholders' equity.

     Common Stock

     During 1996, the Company consummated sales of restricted common stock under
various  private  placement  agreements,  including  sales of  convertible  debt
securities.  Proceeds  raised from these sales  aggregated  $11,928,000,  net of
offering  commissions and expenses of approximately  $1,664,000 and the discount
of $2,810,000  pertaining to the convertible  debt. A total of 19,286,000 shares
were  sold at  prices  ranging  from  $0.20 to $2.00  per  share.  Approximately
9,104,000 shares were also issued in 1996 pursuant to valuation guarantees under
stock transactions  during the years ended December 31, 1994 and 1995 (3,711,000
shares) and  pursuant to  valuation  guarantees  and the  settlement  of the SPC
transaction described in Note 3 (5,393,000 shares).

  During 1995, the Company  consummated  sales of restricted  common stock under
various  private  placement   agreements.   Proceeds  raised  from  these  sales
aggregated $8,867,000, net of offering commissions and expenses of approximately
$1,500,000. A total of 19,340,000 shares (excluding 555,000 shares sold under an
option) were sold at prices  ranging  from $0.20 to $2.00 per share.  A total of
991,000 shares were also issued pursuant to valuation guarantees.

  During 1994, the Company  consummated  sales of restricted  common stock under
various  private  placement   agreements.   Proceeds  raised  from  these  sales
aggregated  $2,411,000,  net of offering commissions and expenses  approximating
$389,000.  A total of 4,589,000 shares were sold (excluding  600,000 shares sold
under an option) at prices ranging from $0.50 to $1.25 per share.

     Convertible Debt Securities

     In 1996,  the Company  received net proceeds of  approximately  $9,931,000,
net of commissions of $1,371,000 relating to the placement of convertible debt
securities.  These  instruments were convertible to 16,632,000  shares of common
stock of the  Company  at  discounts  ranging  from 20% to 32.5% from the market
price on the date of conversion.  In connection  with this  discount,  SEC Staff
comments and consistent  with SEC observer  comments at the Emerging Issues Task
Force  meeting on March 13, 1997 related to this topic,  the Company  recorded a
non-cash   interest  charge  related  to  these   securities  of   approximately
$2,810,000. All of these convertible debt securities were converted during 1996.

     Transactions with Officers, Employees and Consultants

     In November  1996, the Company  issued  2,300,000  restricted and 2,775,000
unrestricted shares of the Company's common stock to various officers, employees
and consultants.  These shares are subject to forfeiture if the Company does not
ultimately  sign  contracts  valued in excess of  $3,000,000  during 1997.  Such
shares had a fair value at the date of  issuance of  $1,508,000,  which has been
recorded as a non-cash  charge in the Company's  statement of operations for the
year ended December 31, 1996. In addition to the shares  identified  above,  the


                                      
<PAGE>
                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

7.   SHAREHOLDERS' EQUITY (continued)

     Transactions with Officers, Employees and Consultants (continued)

Company issued 7,680,000  shares of common stock in 1996 to officers,  employees
and consultants  which were not subject to forfeiture.  These additional  shares
had a fair value at the date of issuance of  $3,446,000,  which is included as a
non-cash  charge in the  Company's  statement of  operations  for the year ended
December 31, 1996.

In June 1996,  the  Company  entered  into an  agreement  with a  consultant  in
connection with the marketing of the Company's d.b.Express product.  Pursuant to
such agreement, the consultant has the ability to earn 250,000 options for every
$1,250,000 in net  d.b.Express  revenue,  up to a maximum of 1,000,000  options.
This  agreement  expires on December 31, 1997,  and the options have an exercise
price of $5.00 per share (originally priced at $.50 per share). In addition, the
Company  entered into  agreements  with this  consultant  which  provide for the
following additional compensation:

 .     425,000  options to purchase  the  Company's  common stock at an exercise
       price of $0.65  per  share,  which  expires  on  December  31,  1998.  In
       connection with this grant, the Company recorded a non-cash charge to the
       statement  of  operations  of $388,790 for the year ended  December  31,
       1996.
 
 .     The consultant was loaned  $250,000  payable in five annual  installments
       of  $50,000,  plus  interest  at 6%  per  annum.  In  January  1997,  the
       consultant repaid the entire loan balance including interest through that
       date.

 .     The  consultant  receives  annual  compensation  of  $80,000  per  annum,
       renewable  automatically  with  termination  on  one  year's  notice.  In
       addition,  the Company paid  approximately  $220,000 of other agreed-upon
       expenses of the consultant during 1996.

 .     A bonus of $200,000 payable should the Company achieve  $5,000,000 of net
       d.b.Express revenue specifically related to the consultant's activities.

Consulting  expenses  related  to  restricted  stock and  option  issuances  and
reflected in the consolidated  statements of operations  amounted to $1,118,000,
$2,155,000, and $1,199,000 for the years ended December 31, 1996, 1995 and 1994,
respectively.

In December  1995,  the Company  entered  into an agreement  with Perot  Systems
Corporation  ("Perot")  in  connection  with the  marketing  of the  d.b.Express
technology.  The Company issued  500,000  options at $2.56 per share to purchase
common stock in  connection  with the  agreement  and  recognized  an expense of
$235,000  representing  the  fair  value  of  such  options.  Pursuant  to  such
agreement, Perot also has the ability to earn up to 2,250,000 options at a price
of   $2.56   per   share,   at   the   rate   of   50,000   options   for  every
<PAGE>
                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

7.  SHAREHOLDERS' EQUITY (continued)

     Transactions with Officers, Employees and Consultants (continued)

$1,000,000 of d.b.Express product revenue in excess of $5,000,000, over a period
of two  years,  commencing  December  1995.  Additionally,  Perot  could  earn a
commission of 30% on all future sales of d.b.Express  over a period of two years
commencing  December 1995.  During 1996, the agreement was amended to change the
terms such that Perot  would  receive:  a) 30% of gross  revenue  created by the
sales  or  license  of  the  d.b.Express   technology   from  sources   directly
attributable  to Perot,  or, b) 10% of gross  revenue from sources not generated
directly by Perot,  but where Perot  participates  substantially in the sales or
license  process.  To date, no significant  revenue has been earned through this
agreement and, accordingly, no additional options or commissions have been paid.
In August 1997,  the Company gave notice to  terminate  the contract  with Perot
effective December 1997 (Note 11).

     During the fourth  quarter of 1995,  the Company  also entered into various
other  marketing  and  consulting  agreements  expiring at various dates through
November  1997.  The Company  issued  1,678,000  options at $1.50 per share,  to
purchase  common  stock in  connection  with  these  agreements  and  recognized
expenses  aggregating  $1,056,000  representing  the fair value of such options.
Pursuant  to such  agreements,  these  firms also have the ability to earn up to
1,600,000  options at a price of $1.50 per share  contingent upon defined levels
of  d.b.Express  product  revenue.  In April 1997,  1,000,000  of the  1,678,000
options described above were rescinded and the Company issued 400,000 restricted
shares  of the  Company's  common  stock  to  such  consultants  in lieu of such
options.

  During July and August 1994, the Company entered into one-year agreements with
several financial relations and advisory firms to assist in expanding individual
and institutional  investor interest in the Company, as well as to advise in the
development of its business, including acquisition financing. The Company issued
600,000  options  at $.01 per share and  700,000  options  at $1.12 per share to
purchase common stock in connection with the agreements.  The difference between
the fair market value of the  Company's  common stock and the exercise  price of
the options issued, approximating $706,000 was included in "prepaid expenses and
other current  assets" and was being  amortized over the terms of the applicable
agreements at September 30, 1994. In the fourth  quarter of 1994, as a result of
the inability to realize the amounts previously deferred,  the Company wrote off
the remainder of these deferred costs.

  During December 1994, the Company issued 350,000 shares of common stock having
a fair market value of $339,000 to a consultant for telecommunication consulting
services performed in the fourth quarter of 1994.

     Stock Option Plans

     During October 1993, the Company  adopted the Employees'  1993 Stock Option
Plan (the "Employees' Plan"), the 1993 Directors, Officers and Consultants Stock
Option  Plan  (the "DOC  Plan")  and the 1993  Prior  Service  Plan (the  "Prior
Services Plan"),  collectively  the "1993 Plans," all of which are non-qualified

                                      
<PAGE>
                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

7.   SHAREHOLDERS' EQUITY (continued)

     Stock Option Plans (continued)

plans providing for the grant of stock or options to eligible participants.  The
Company may issue stock or options for up to an aggregate  20% of the  Company's
outstanding   common  stock  under  the   Employees'   and  DOC  Plans  (without
consideration of the options issued under the Prior Services Plan). The Board of
Directors has the authority to determine  all terms and  provisions  under which
options are granted,  including  the persons to whom  options are  granted,  the
number of shares and  exercise  price per share of common stock to be covered by
each option and the time or times at which options shall be exercisable.

During 1994, the Board of Directors  authorized a restriction on the exercise of
substantially  all  outstanding  options and warrants.  Exercises of options and
warrants are subject to the requirement that, at the time of exercise,  at least
25% of the  Company's  authorized  capital  stock be  unissued,  unreserved  and
available for issuance.

On March 20, 1996, the Company's  shareholders  approved the  termination of the
above 1993 Plans and the  adoption of the 1995 Stock  Incentive  Plan (the "1995
Incentive Plan").  Eligible participants in the 1995 Incentive Plan are officers
and  employees of the Company and  consultants  to the Company.  Pursuant to the
1995  Incentive  Plan,  the Board of Directors  or a committee  thereof may also
grant restricted stock,  stock appreciation  rights,  performance grants or such
other types of awards as it may  determine.  The total  number of common  shares
issuable upon the exercise of all stock options  under the 1995  Incentive  Plan
may not exceed 10,000,000 shares,  subject to adjustments upon the occurrence of
certain events, as defined. The 1995 Incentive Plan provides for the granting of
(i) incentive  options to purchase the Company's common stock at the fair market
value on the date of  grant  and (ii)  non-qualified  options  to  purchase  the
Company's  common  stock at not less than the fair  market  value on the date of
grant.

On March 20, 1996, the Company's shareholders also approved the Outside Director
Stock Option Plan (the  "Director  Plan").  Directors of the Company who are not
full-time  employees of the Company are eligible to  participate in the Director
Plan. The total number of common shares  issuable upon the exercise of all stock
options  under the  Director  Plan may not  exceed  500,000  shares,  subject to
adjustments upon the occurrence of certain events,  as defined.  Pursuant to the
Director Plan, each non-employee director will be granted options with five year
terms commencing  March 1, 1996, and on the first day of each March  thereafter,
to  purchase  that  number of shares of common  stock  having a market  value of
$50,000. Options granted shall vest in one year.

The  Company  has also  issued  options  during  1996,  1995 and 1994 with terms
determined  by the Board of Directors  at the time of grant (the  "Miscellaneous
Options").

                                      
<PAGE>
                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

7.   SHAREHOLDERS' EQUITY (continued)

     Stock Option Plans (continued)

The Company has adopted the  disclosure  provisions  of  Statement  of Financial
Accounting Standards No. 123,  "Accounting for Stock-Based  Compensation" ("SFAS
123").  The Company applies APB Opinion No. 25,  "Accounting for Stock Issued to
Employees," and related interpretations in accounting for its plans and does not
recognize compensation expense for its employee stock-based  compensation plans.
If the Company had elected to recognize compensation expense based upon the fair
value at the date of grant for awards  under  these  plans  consistent  with the
methodology prescribed by SFAS 123, the effect on the Company's net loss and net
loss per  share  for the  year  ended  December  31,  1996 and 1995  would be as
follows:

<TABLE>
<CAPTION>
                                            Year ended December 31,
                                            ------------------------ 
                                            1996                1995
                                            ----                ---- 

<S>                                      <C>                 <C>        
Net Loss             As Reported         $18,953,000         $18,365,000
                     Pro Forma           $19,363,000         $20,202,000

Net Loss Per Share   As Reported            $0.27               $0.37
                     Pro forma              $0.27               $0.41

</TABLE>

These pro forma amounts may not be representative of future disclosures  because
they do not take into effect pro forma  compensation  expense  related to grants
made before 1995.
<PAGE>
                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

7.   SHAREHOLDERS' EQUITY (continued)

     Stock Option Plans (continued)

The fair  value of  options  granted  during  1996 and 1995,  respectively,  are
estimated on the date of grant using the Black-Scholes option-pricing model with
the following  assumptions:  (1) expected volatility ranging from 79% to 157% in
1996 and from 80% to 161% in 1995,  (2) risk-free  interest  rates from 5.12% to
6.37% in 1996 and 5.37% to 7.75% in 1995,  and (3) expected lives ranging from 1
to 4.25 years in 1996 and 1.25 to 5.3 years in 1995.

The  following  is a summary of stock option  activity  for 1994,  1995 and 1996
(share amounts are in thousands):


<TABLE>
<CAPTION>
                                                                  Weighted Average
Prior Service Plan                                     Shares      Exercise Price
-------------------                                    ------      -----------------
<S>                                                    <C>               <C> 
Outstanding at January 1, 1994                            -           $  -  
Granted                                                 4,318          1.03
                                                        -----
Outstanding and exercisable at December 31, 1994        4,318          1.03
Forfeited                                                 (50)         1.03
                                                        -----     
Outstanding and exercisable at December 31, 1995        4,268          1.03
Exercised                                                (532)         1.03
Forfeited                                                (117)         1.03
                                                        ----- 
Outstanding and exercisable at December 31, 1996        3,619          1.03
                                                        =====
</TABLE>

Weighted average remaining contract life:             2 years
Range of exercise price:                          $0.50  to $4.63
<PAGE>
                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994
7.   SHAREHOLDERS' EQUITY (continued)
     Stock Option Plans (continued)
<TABLE>
<CAPTION>
                                                                  Weighted Average
DOC Plan:                                              Shares      Exercise Price
-------------------                                    ------      -----------------
<S>                                                    <C>               <C> 
Outstanding at January 1, 1994                           -             $    -
Granted                                                  905               1.87
                                                       ----- 
Outstanding and exercisable at December 31, 1994         905               1.87
Granted                                                5,301               0.50
Exercised                                               (105)              1.06
Forfeited                                               (623)              1.90
                                                       ----- 
Outstanding and exercisable at December 31, 1995       5,478               1.18
Exercised                                                (78)              1.18
Forfeited                                               (197)              1.18
                                                       ----- 
Outstanding and exercisable at December 31, 1996       5,203               1.18
                                                       =====
</TABLE>
   Weighted average remaining contract life:  2.6 years
   Range of exercise price:  $0.25 to $1.50
   The weighted average fair value of options granted during 1995 was $0.86 
   per share.
<TABLE>
<CAPTION>
                                                                  Weighted Average
1995 Incentive Plan:                                   Shares      Exercise Price
-------------------                                    ------      -----------------
<S>                                                    <C>               <C> 
Outstanding at January 1, 1996                            -           $  -
Granted                                                  397            1.41
Forfeited                                                (71)           1.80
                                                        ----
Outstanding and exercisable at December 31, 1996         326            1.33
                                                        ====
</TABLE>
   Weighted average remaining contract life:  1.49 years
   Range of exercise price:  $0.81 to $1.80
   The weighted average fair value of options granted during 1996 was $0.64.
<TABLE>
<CAPTION>
                                                                  Weighted Average
1993 Employees' Plan:                                  Shares      Exercise Price
--------------------                                   ------      -----------------
<S>                                                    <C>               <C> 
Outstanding at January 1, 1994                             -           $ -
Granted                                                   702            1.18
Forfeited                                                (180)           1.18
                                                        ----- 
Outstanding and exercisable at December 31, 1994          522            1.18
Granted                                                   957            1.14
Forfeited                                                (355)           1.07
                                                        ----- 
Outstanding and exercisable at December 31, 1995        1,124            1.18
Exercised                                                 (10)           1.18
Forfeited                                                 (56)           1.18
                                                        ----- 
Outstanding and exercisable at December 31, 1996        1,058            1.18
                                                        ===== 
</TABLE>
 Weighted average remaining contract life:  2.38 years
 Range of exercise price:  $.50 to $1.50
 The weighted average fair value of options granted during 1995 was $0.51.
<PAGE>
                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

7.   SHAREHOLDERS' EQUITY (continued)

     Stock Option Plans (continued)
<TABLE>
<CAPTION>
                                                                  Weighted Average
Miscellaneous Options:                                Shares      Exercise Price
-----------------------                                ------      -----------------
<S>                                                    <C>               <C> 
Outstanding at January 1, 1994                           645            $0.58
Granted                                                1,645             0.64
Exercised                                               (600)            0.01
Forfeited                                               (700)            1.13
                                                       -----
Outstanding at December 31, 1994                         990             0.64
Granted                                                4,928             0.91
Forfeited                                               (123)            0.60
                                                       -----
Outstanding at December 31, 1995                       5,795             0.87
Granted                                                3,052             0.84
Exercised                                             (1,024)            0.87
Forfeited                                                (29)            0.87
                                                       -----
Outstanding at December 31, 1996                       7,794             0.90
                                                       =====
</TABLE>

   Weighted average remaining contract life:    2.44 years
   Range of exercise price:  $0.35 to $2.43

     At  December  31,  1995 and 1996,  5,765,694  and  7,310,779  options  were
exercisable,  respectively.  The weighted  average fair value of options granted
during 1995 and 1996 was $0.97 and $0.47 per share, respectively.

     At December 31,  1996, a total of  17,516,000  options are  exercisable  at
exercise  prices  ranging from $.25 to $4.63 per share.  At December 31, 1996, a
total of  21,747,569  shares of the  Company's  common  stock were  reserved for
options, warrants and contingencies.

     Total  compensation  costs recognized for  stock-option  awards amounted to
$621,013  and  $2,567,527  for the  years  ended  December  31,  1996 and  1995,
respectively.

                                      
<PAGE>
                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

7.   SHAREHOLDERS' EQUITY (continued)

     Stock Option Plans (continued)

     During August 1994, the Company's Board of Directors authorized a reduction
of the exercise price covering 6,760,000  outstanding options to purchase common
stock to  $1.25  per  share  (the  fair  market  value at the date of the  Board
action).  The substantial  majority of such options were previously issued at an
exercise price of $2.56 per share.

     During May 1995, the Company's Board of Directors authorized a reduction of
the exercise price of 4,184,500  outstanding options to purchase common stock to
$.50 per share ($.22  higher than the fair market value at the date of the Board
action).  The substantial  majority of such options were previously issued at an
exercise price of $1.25 per share.

8.   INCOME TAXES

     The tax effects of  temporary  differences  which give rise to deferred tax
assets and  liabilities  at December 31, 1996 and 1995 are summarized as follows
(in thousands):

<TABLE>
<CAPTION>
                                                       December 31,
                                                   -------------------
Deferred tax assets                                1996           1995
                                                   ----           ---- 
<S>                                             <C>           <C>     
Net operating loss carryforwards                $ 17,445      $ 11,578
Tax credit carryforward                              504           641
Compensation                                       4,282         2,390
Fixed and intangible assets                          388         1,763
Other                                                814         1,112
                                                ---------     --------        
                                                  23,433        17,484

Deferred tax liabilities
  Capitalized software development costs            (398)       (1,097)
                                                --------       -------  
                                                  23,035        16,387
Valuation allowance                              (23,035)      (16,387)
                                                --------       -------
                                                 $     0       $     0
                                                ========       ========      
</TABLE>
                                      
<PAGE>
                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

8.   INCOME TAXES (continued)

     SFAS 109  requires a valuation  allowance  against  deferred tax assets if,
based on the weight of available evidence,  it is more likely than not that some
or all of the  deferred  tax  assets  may not be  realized.  The full  valuation
allowances at December 31, 1996 and 1995 reflect  uncertainties  with respect to
future realization of net operating loss carryforwards.

     At December  31, 1996,  the Company has net  operating  loss  carryforwards
approximating  $41,000,000  available to reduce  future  taxable  income.  These
losses, which expire through 2011, are subject to limitations as a result of IRC
Section 382 rules governing  changes in control.  The Company has not quantified
the amount of such limitations.

9.   UNUSUAL CHARGES

     Included  in unusual  charges for the year ended  December  31,  1996,  are
charges aggregating  $2,590,000  including the following:  $2,075,000,  of which
$2,000,000  (representing  2,614,000  shares of the  Company's  common stock) is
non-cash,  for costs associated with the settlement of certain  litigation (Note
11),  and  $515,000  of  which  $415,000  (representing  750,000  shares  of the
Company's  common  stock) is non-cash  relating to the final  settlement  of SPC
(Note 3).

     Included  in unusual  charges for the year ended  December  31,  1995,  are
charges aggregating  $1,102,000 including the following:  Penalty Amounts to SPC
of $638,000  (Note 3) and  settlement  of certain  litigation  of  approximately
$464,000 (Note 11).

     Included  in unusual  charges for the year ended  December  31,  1994,  are
charges aggregating  $3,178,000  including the following:  write-off of goodwill
relating  to Computer  Concepts  Europe Ltd.  ("CCEL")  of  $1,800,000.  Penalty
Amounts to SPC of $560,000,  write-off of aborted  acquisition costs of $260,000
and the reversal of revenue pertaining to CCEL of $500,000.

                                      
<PAGE>
                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

 10.   RELATED PARTY AND OTHER TRANSACTIONS

     For the years ended December 31, 1996 and 1995,  executive  officers of the
Company  received  stock-based  compensation  aggregating  $899,000  in 1996 and
$168,000 in 1995. One of these  officers has not received any cash  compensation
during 1996,  nor, at any time since the  Company's  inception.

     Two executive  officers of the Company have received  advances from time to
time,  with such  advances  being  payable  upon demand and bearing no interest.
Effective January 1, 1997, these advances are interest bearing at the rate of 7%
per annum.

     During the fourth quarter, the Company advanced  approximately  $126,000 to
another  officer.  The advance was  settled  with the Company  prior to the year
ended  December 31, 1996,  through the transfer of marketable  securities to the
Company with a market value of $126,000.

     During the years  ended  December  31, 1996 and 1995,  the Company  paid an
outside  Director  fees for legal  services  aggregating  $127,000  and  $64,000
respectively.

     During the years  ended  December  31, 1996 and 1995,  the Company  paid an
outside Director consulting fees of $52,000 and $30,000, respectively.

11. COMMITMENTS AND CONTINGENCIES

     Commission/Royalty Commitments

     As  described  in  Note 7 the  Company  is  obligated  to pay  Perot  a 30%
commission  on  gross  revenue  from  the  sale or  license  of the  d.b.Express
technology from sources  generated  solely by Perot or a 10% commission on gross
revenue  from  sources  not  generated   directly  by  Perot,  but  where  Perot
participates  substantially in the sale or license process.  In August 1997, the
Company gave notice to  terminate  the contract  with Perot  effective  December
1997.  Additionally,  the Company is  obligated to pay a consultant a royalty of
20% on net sales or license revenue  specifically  generated by that consultant.
The Company is further  obligated to pay to another  consultant a 10% royalty on
net sales or license revenues specifically generated by that consultant.

     Leases

     The   Company   leases   certain   computer   equipment   under   long-term
non-cancelable leases which are classified as capital leases and are included as
part of property and equipment. Operating leases are primarily for office space,
equipment and automobiles.

     At December 31, 1996, the future minimum lease payments under operating and
capital leases are summarized as follows:

                                      
<PAGE>
                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

11. COMMITMENTS AND CONTINGENCIES (continued)

    Leases (continued)
<TABLE>
<CAPTION>

     Year ending December 31,        Operating Leases           Capital Leases

<S>                                     <C>                       <C>      
           1997                         $ 936,000                 $ 120,000
           1998                           758,000                    62,000
           1999                           645,000                      -
           2000                           521,000                      -
           2001                           275,000                      -
                                       ----------                 ---------
                                        3,135,000                   182,000
  Amounts representing interest              -                       11,000
                                       ----------                 ---------      
  Net                                  $3,135,000                 $ 193,000
                                       ==========                 =========
</TABLE>

     Rent expense approximated  $690,000,  $619,000 and $437,000,  for the years
ended December 31, 1996, 1995 and 1994, respectively.

     Employment Agreements

     The Company has entered into various  employment  agreements with three key
employees for base compensation  aggregating $400,000 per year. These agreements
expire at various times during 1996 and 1997 and will be  automatically  renewed
for  succeeding  terms of one year unless the Company,  or the  employee,  gives
written notice.

     Benefit Plan

     The Company  provides  pension  benefits to  eligible  employees  through a
401(k) plan.  Employer  matching  contributions to this 401(k) plan approximated
$36,000 for the year ended  December  31, 1996 and $26,000 for each of the years
ended December 31, 1995 and 1994.

     Registration Statements/Restricted Securities

     The Company has used  restricted  common  stock for the purchase of certain
companies (Note 3) and has sold restricted  common stock in private  placements.
At December 31, 1996,  11,716,000  shares of restricted common stock were issued
and outstanding.

     Legal Matters

     During May 1994,  the Company and certain  officers  received  notification
that they have been named as defendants in a class action alleging violations of
certain securities laws with respect to disclosures made regarding the Company's
acquisition  of Softworks  during 1993. On September 12, 1996, the settlement of
this class  action  claim was  approved  by the United  States  District  Court,
Eastern  District of New York. The Company  recorded a charge to earnings in the
first  quarter of 1996 of $2,075,000  to reflect this  settlement  consisting of
$75,000 plus 2,614,000 shares of the Company's common stock.

                                      
<PAGE>
                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

11. COMMITMENTS AND CONTINGENCIES (continued)

    Legal Matters (continued)

     In September 1994, the Company received notice of an action alleging breach
of contract regarding an acquisition  transaction initiated during 1993. In July
1995, a settlement agreement was reached whereby the Company was required to pay
$75,000  and agreed to an  amendment  of the  original  contract  to acquire the
license for additional software.  Pursuant to such amendment, the Company issued
a non-interest  bearing  promissory note in the amount of $388,800 payable in 36
monthly  installments,  with the final payment  scheduled for September 1, 1998,
which  amount  was  recorded  as an  unusual  charge  in the  1995  consolidated
statement of operations.

     In July 1995, the Company received notice of an action alleging the Company
had not used its best efforts to register warrants to purchase 500,000 shares of
the  Company's  common stock within 30 days from written  notice to the Company,
pursuant to a financial consulting agreement. The Company has maintained that it
has always used its best efforts to cause the  registration of those warrants to
occur.   However,  to  avoid  the  expense  and  resolve  the  uncertainties  of
litigation,  the  matter  was  settled  by  including  385,000  warrants  in the
Company's  then  pending  registration  statement,  with the  balance of 115,000
warrants being  canceled.  As the  registration  statement  became  effective on
August 9, 1996, the Company believes this matter has been resolved; however, the
Company is unable to predict the ultimate outcome of this suit and, accordingly,
no adjustment  has been made in the  consolidated  financial  statements for any
potential losses.

     In July 1995, the Company and certain officers  received  notification that
they  have  been  named as  defendants  in a class  action  claim in  regard  to
announcements  and  statements  regarding the  Company's  business and products.
During August and September  1995,  four  additional,  substantially  identical,
class  action  claims were made.  In November  1995,  the five  complaints  were
consolidated  into one action.  Plaintiffs  have moved to certify a Class Action
and the Company did not oppose the motion.  No damages  have been  specified in
any of these class action claims.  Based on consultation with legal counsel, the
Company and its officers believe that  meritorious  defenses exist regarding the
claims and they are vigorously defending against the allegations. The Company is
unable to predict  the  ultimate  outcome of these  claims,  which  could have a
material  adverse impact on the consolidated  financial  position and results of
operations of the Company, and, accordingly, no adjustment has been made for any
potential losses.  See Note 12 - "Subsequent events" for updated information.

     On June 11,  1996,  the  Company  received  notice  of  entry of a  default
judgement  against it for  $1,500,000  and  specific  performance  to effect the
registration  of common stock held by Merit  Technology,  Inc. in a matter which
the Company had not been served or  received  notice (In Re:  Merit  Technology,
Inc., Debtor, U.S.  Bankruptcy Court,  Eastern District of Texas). On August 13,
1996, the default  judgement was set aside by the Court.  During  December 1996,
this matter was settled with the Company  issuing  100,000  shares of its common
stock.

     During  March  1997,  the Company  received a  Complaint  filed in the U.S.
District Court for the Western District of Texas, by Dell Computer  Corporation.
A Second Amended Complaint alleges that the Company failed to deliver product as
contracted  for and  further  alleges  damages in excess of  $850,000.  Based on
consultation  with legal  counsel,  the Company and its  officers  believe  that
meritorious  defenses  exist  regarding  the  claims  and  they  are  vigorously
defending against the allegations. The Company is unable to predict the ultimate
outcome of this claim,  which could have an adverse  impact on the  consolidated
financial position and results of operations of the Company, and accordingly, no
adjustment has been made for any potential losses.
<PAGE>
                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

11. COMMITMENTS AND CONTINGENCIES (continued)

    Legal Matters (continued)

     In March 1995, an action was originally commenced against the Company and a
number of defendants.  In early 1997,  after a change in counsel,  the plaintiff
amended the  complaint  for a second  time,  now naming as  defendants  only the
Company and three of its officers.  The second  amended  complaint  alleges that
certain  third  parties,  unrelated  to the  Company,  transferred  certificates
representing  10,000,000  shares of the Company's common stock to the plaintiff.
The  complaint  further  alleges that such shares were  endorsed in blank by the
third  parties  and  became  bearer  securities  which  were  negotiated  to the
plaintiff by physical  delivery.  The certificates had not been legally acquired
from the Company  and the  certificates  were  reported  to the  Securities  and
Exchange  Commission  by the  Company  as  stolen  certificates.  Plaintiff  has
requested  validation of the transfer of the certificates and is seeking damages
of an unspecified  amount,  consisting of alleged  diminution in market value of
the subject shares from 1994 through the date of any judgment in the plaintiff's
favor.  The  Company  and its  officers  believe  that  the  Company's  position
regarding the claim has substantial factual and legal support and are vigorously
defending  the matter.  However,  the Company is unable to predict the  ultimate
outcome of this claim and,  accordingly,  no  adjustments  have been made in the
consolidated financial statements for any potential losses or potential issuance
of common stock.

12. SUBSEQUENT EVENTS

     The Company's  financial  statements for the three years ended December 31,
1996 were  originally  issued by the Company on May 6, 1997 and were included in
the Company's  annual report on Form 10-K for the year ended  December 31, 1996.
These  financial  statements  are currently  being  reissued  and,  accordingly,
significant  events  occurring after May 6, 1997 are required to be disclosed in
these consolidated financial statements.

     Sales of Convertible Debentures and Common Stock

     As  discussed  in Note 1, in May 1997,  the  Company  was in the process of
negotiating the sale of convertible securities in order to sustain the Company's
operations.  Subsequently,  the Company received approximately  $3,865,000 (less
commissions  and fees of  approximately  $484,000)  from the sale of convertible
debentures, and $3,000,000 (less commissions and fees of $240,000) from the sale
of common stock.

<PAGE>
                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

12. SUBSEQUENT EVENTS (continued)

     Sales of Convertible Debentures and Common Stock (continued)

Convertible  debentures.  During the quarter  ended June 30,  1997,  the Company
raised  approximately  $3,865,000  (less  commissions and fees of  approximately
$484,000) through the sale of non-interest bearing convertible debentures. These
debentures had a maturity date in May, 1998, and were convertible, at the option
of the holder,  commencing 45 days from the date of issue into restricted common
stock of the Company. The convertible  debentures had an assured discount of 25%
from the prices of the Company's  common stock at various  defined  periods.  In
connection  with this  discount,  SEC Staff  comments  and  consistent  with SEC
observer  comments at the Emerging  Issues Task Force  meeting on March 13, 1997
related to this topic,  the Company recorded a deferred asset of $1,288,000 upon
the  receipt of the funds and  amortized  this  discount  amount over the period
commencing  on the date the  security  was  issued  to the date it first  became
convertible.  Accordingly,  the  Company  recorded  a non-cash  interest  charge
related to these  securities of $1,288,000.  During the quarter ended  September
30, 1997, the entire amount of the debentures,  $3,865,000 had converted into an
aggregate  of  11,982,343   shares  of  the  Company's  common  stock  and  has,
accordingly, increased the Company's shareholders' equity by an equal amount.

Common  stock.  During  the  quarter  ended  September  30,  1997,  the  Company
consummated  a sale of  restricted  common  stock under a private  placement  to
accredited  United States  investors under Regulation D. Proceeds from this sale
were  $3,000,000   (less   commissions  and  fees  of  $240,000).   A  total  of
approximately  4,615,000  shares  were  sold  at a price  of  $0.65  per  share.
Additional  shares may be  required to be issued  under a  valuation  guarantee
should the closing bid price of the  Company's  common  stock,  as stated on the
Nasdaq SmallCap Market, not exceed an average of $0.78 for any five consecutive
trading days during the thirty days immediately  following the effective date of
a Registration Statement.

     While the proceeds from the sales of the convertible  debentures and common
stock  satisfied  the  Company's  immediate  cash needs,  further  financing (or
positive  cash  flows  from  operations)  will be  required  in order to sustain
operations in the near term.

     Sale of MapLinx

     As  discussed  in Note 3, in May 1997,  the  Company  was in the process of
attempting  to sell the net assets of  MapLinx  and in July  1997,  the  Company
completed a transaction in which it sold all rights to the  underlying  software
technologies  of MapLinx.  further,  as part of the  transaction,  the purchaser
acquired all of MapLinx' current assets and assumed all of its liabilities.  The
sale price of  approximately  $850,000 was  adjusted  (reduced) by the excess of
MapLinx'  current  liabilities  over current  assets  (approximately  $380,000),
resulting in a net sales price of $470,000.  Approximately  $235,000 was paid at
closing,  the balance of $235,000  plus interest is due six months from closing.
As a result,  the Company  recognized  an  $813,000  gain on the sale of the net
assets of MapLinx in the quarter ended September 30, 1997.

<PAGE>
                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

12. SUBSEQUENT EVENTS (continued)

     Settlement of Class Action Claim

     As discussed in Note 11, in May 1997, the Company was unable to predict the
ultimate  outcome of the class  action  claim which  originated  in July,  1995.
However,  in July 1997,  in an effort to avoid the  expense of and  resolve  the
uncertainty of litigation,  the Company  tentatively agreed to a Stipulation and
Agreement of  Settlement  of this class action  ("Stipulation  Agreement").  The
Company  continues to deny any wrongdoing  with respect to this action and seeks
to settle to avoid further  substantial  expense,  inconvenience  and risk.  the
plaintiff's counsel is presently providing notice of the action and the proposed
settlement to the class members. A hearing is scheduled to be heard by the Court
on December 12, 1997  ("Settlement  Hearing")  at which time it is  contemplated
that the Court will enter a final order  approving  the  following  terms of the
settlement.  If  approved,  the  Company  will  deliver  and place  into  escrow
1,000,000  shares of its common stock. In the event that the average closing bid
price of the  Company's  common  stock  for the ten  trading  days  prior to the
Settlement  Hearing  is less than  $0.50  per  share,  the  Company  will  issue
additional  shares,  determined by dividing $500,000 by the ten day average less
the shares  already placed into escrow.  Further,  the Company and its insurance
carrier will each deposit into escrow $350,000,  totaling  $700,000.  Based upon
the Stipulation  Agreement,  the Company has recorded an $850,000 unusual charge
to earnings in the quarter ended June 30, 1997.

     Shareholder's equity

     During  the nine  month  period  ended  September  30,  1997,  the  Company
consummated  sales of 85,250 shares of common stock  resulting from the exercise
of stock options. Proceeds raised from these sales aggregated $23,000.

     During the nine month period ended  September 30, 1997,  the Company issued
6,945,000   shares  of  common   stock,   6,145,000  of  which  are  subject  to
registration,  to officers,  employees and outside consultants. The shares had a
fair value (adjusted for the value of 2,000,000 canceled options) on the date of
issuance of approximately  $2,477,000 and,  accordingly,  the Company recorded a
non-cash compensation charge of approximately $2,477,000.  further, 2,500,000 of
these shares are subject to forfeiture based upon specified Company  performance
criteria. Additionally, for the nine months ended September 30, 1997, in lieu of
cash compensation to various officers,  employees and consultants, the Company's
Board of Directors  authorized  a reduction  of the exercise  price of 3,915,000
outstanding  options to purchase the  Company's  common stock to prices  ranging
from  $0.01 to $1.00 per share.  The  options  originally  had  exercise  prices
ranging  from  $0.50 to $1.50  per  share.  Accordingly,  the  Company  recorded
non-cash   charges  of  approximately   $1,271,000  for  employee   compensation
(calculated  using the intrinsic  method) and  consulting  services  (calculated
using the fair value method). The Company also recorded a non-cash  compensation
charge of $18,000  for  options  granted to two key  employees  as part of their
employment contract agreements.

<PAGE>
                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

12. SUBSEQUENT EVENTS (continued)

     Shareholder's equity (continued)

     During October,  1997, the Company issued  1,147,652  restricted  shares of
common stock to HPS America,  Inc. ("HPS") for settlement of product development
costs aggregating $860,739 owed to HPS and its affiliates. Additional shares may
be required to be issued  should the net proceeds  from the sale of these shares
not equal  $0.75 per  share.  In the event  the net  proceeds  exceed  the gross
valuation  amount,  $860,739,  then the  Company  shall be  entitled to either a
credit to be applied against  potential future HPS invoices or the return to the
Company of 75% of the excess  proceeds  (as  determined  by the per share  sales
price in excess of $0.75).

     At the Company's  annual  shareholders'  meeting on November 26, 1997,  the
Company's  shareholders  passed a  resolution  to grant the  Board of  Directors
authority to amend the Certificate of  Incorporation  to increase the authorized
shares of common  stock  from  150,000,000  to  300,000,000.  Additionally,  the
shareholders granted the Board of Directors authority to effect a reverse stock
split in a ratio  ranging from  one-for-two  through  one-for-ten.  The Board of
Directors has not caused either of these  alternatives to become effective,  nor
do they have any present plans to do so.

     Software Distribution Agreement

     In July 1997,  the Company  acquired from  Cognizant  Technology  Solutions
Corporation  ("CTS")  the rights to two  technologies  (the  "Technology")  that
complement the Company's existing Year 2000 product  solutions.  Pursuant to the
software distribution  agreement, in exchange for the Technology rights, the
Company is required to pay CTS a royalty on sales of the  Technology  at defined
rates subject to minimum annual royalties as follows: $100,000 in 1997, $900,000
in 1998, $1,400,000 in 1999 and $400,000 in 2000.
<PAGE>


                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                                      INDEX
<TABLE>
<CAPTION>


PART I -  FINANCIAL INFORMATION                               Page

<S>                                                            <C>
  Condensed Consolidated Balance Sheets
  as of September 30, 1997 and December 31, 1996                1

  Condensed Consolidated Statements of Operations
  For the Three and Nine Months Ended September 30, 
  1997 and 1996                                                 2

  Condensed Consolidated Statements of Cash Flows
  For the Nine Months Ended September 30, 1997 and 1996         3

  Notes to Condensed Consolidated Financial Statements          4 - 8

  Management s Discussion and Analysis of Financial
  Condition and Results of Operations                           9 - 12


PART II - OTHER INFORMATION

  Item 1. Legal Proceedings                                     13
  Item 2. Changes in Securities                                 13
  Item 3. Defaults Upon Senior Securities                       13
  Item 4. Submission of Matters to a Vote of Security Holders   13
  Item 5. Other Information                                     13
  Item 6. Exhibits and Reports on Form 8-K                      13
  Signatures                                                    14

</TABLE>

<PAGE>


                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                 as of September 30, 1997 and December 31, 1996
                        (in thousands, except share data)
<TABLE>
<CAPTION>
                                        September 30,        December 31,
                 ASSETS                     1997                 1996
                                            ----                 ---- 
                                         (Unaudited)
CURRENT ASSETS:
<S>                                       <C>                  <C>    
  Cash and cash equivalents               $ 3,600              $ 5,675
  Accounts receivable, net of 
    allowance for doubtful 
    accounts of $350 and $693 in 
    1997 and 1996, respectively            13,065                9,044
  Advances to  officers                       861                  682
  Inventories                                  -                    29
  Prepaid expenses and other 
     current assets                         1,395                1,036
                                           ------               ------   
      Total current assets                 18,921               16,466

INSTALLMENT ACCOUNTS RECEIVABLE, 
     due after one year                     6,980                3,714

PROPERTY AND EQUIPMENT, net                 2,059                1,605

SOFTWARE COSTS,  net                          993                  949

EXCESS OF COST OVER FAIR VALUE OF 
    NET ASSETS ACQUIRED, net of
    accumulated amortization  
    of $2,279  and $2,628 in 
    1997 and 1996, respectively             4,614                4,683

OTHER ASSETS                                  170                  254
                                         --------             --------
                                         $ 33,737             $ 27,671
                                         ========             ========
 
                       LIABILITIES AND SHAREHOLDERS EQUITY

CURRENT LIABILITIES:
   Accounts payable and accrued 
     expenses                            $ 5,936              $  4,227
   Current portion of long- term debt        453                   458
   Deferred revenues                      11,198                 8,972
                                         -------               ------- 
     Total current liabilities            17,587                13,657

DEFERRED REVENUES                          7,373                 3,964

LONG-TERM DEBT                               280                   526

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS  EQUITY:
   Common stock, $.0001 par value; 
   150,000,000 shares authorized; 
   125,535,000 shares in 1997 
   and 101,335,000 shares in 1996 
   issued and outstanding                     13                   10

   Additional paid-in capital             90,839               78,870
   Accumulated deficit                   (82,355)             (69,356)
                                        --------             -------- 
     Total shareholders  equity            8,497                9,524
                                        --------             --------
                                        $ 33,737             $ 27,671
                                        ========             ======== 
</TABLE>
            See Notes to Condensed Consolidated Financial Statements.

<PAGE>

                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
              For the Three and Nine Months Ended September 30, 
                      (in thousands, except per share data)

<TABLE>
<CAPTION>
                                     Three Months Ended       Nine Months Ended
                                        September 30,            September 30,
                                
                                     1997         1996         1997        1996
                                     ----         ----         ----        ---- 

<S>                                 <C>          <C>         <C>         <C>    
REVENUES:                           $6,657       $4,313      $19,931     $12,144
                                    ------       ------      -------     -------   
COSTS AND EXPENSES:
  Cost of revenues and 
     technical support               1,825        1,354        7,046       3,971
  Research and development           1,254          328        2,905       1,004
  Sales and marketing                5,744        2,539       12,821       6,913
  General and administrative         2,413        1,621        7,119       5,115
  Amortization and depreciation        606          798        1,714       2,340
  Unusual charges                       -            -           850       2,075
                                    ------       ------       ------      ------  
                                    11,842        6,640       32,455      21,418
                                    ------       ------       ------      ------

LOSS FROM OPERATIONS                (5,185)      (2,327)     (12,524)     (9,274)

OTHER INCOME/(EXPENSE):
  Gain on sale of net assets  
     of subsidiary                     813          -            813         -

   Interest charge pertaining 
     to the discount
     on convertible debentures        (408)        (630)      (1,288)     (2,810)
                                    ------        ------      ------      ------
NET LOSS                           $(4,780)     $(2,957)    $(12,999)   $(12,084)
                                    ======        ------      ======      ======   
NET LOSS PER SHARE                $  (0.04)     $ (0.04)     $ (0.12)    $ (0.18)
                                    ======        ======      ======      ======   

WEIGHTED AVERAGE COMMON SHARES  
     OUTSTANDING                   117,451       73,982      106,897      66,052
                                   =======       ======      =======     =======           
</TABLE>

       See Notes to Condensed Consolidated Financial Statements.

<PAGE>
                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                     For the Nine Months Ended September 30,
                                 (in thousands)
<TABLE>
<CAPTION>
                                       1997                   1996
<S>                                  <C>                  <C>
OPERATING ACTIVITIES:  
Net loss                            $(12,999)             $(12,084)
Adjustments to reconcile 
   net loss to net cash used in 
   operating activities: 
 Depreciation and amortization:
   Software costs                        480                 1,090
   Property and equipment                679                   531
   Excess of cost over fair 
     value of net assets acquired        552                   712
   Other                                   3                     7
   Common stock and options issued 
     for services                      3,766                   787
   Gain on sale of net assets of 
     subsidiary                         (813)                   -
   Non-cash interest charge  
     pertaining to the discount on
     convertible debentures            1,288                 2,810      
   Non-cash unusual charges              500                 2,000
   Bad debts                              61                    -
Changes in operating assets and 
     liabilities:
     Accounts receivable              (4,235)               (1,455)
     Installment accounts receivable, 
       due after one year             (3,266)               (1,789)
     Inventories                          10                    47
     Prepaid expenses and other 
       current assets                   (134)                 (658)
     Other assets                         81                  (313)
     Deferred revenues                 5,653                 3,381
    Accounts payable and 
       other accrued expenses          2,502                   599
                                      ------                ------  
       Net cash used in operating 
          activities                  (5,872)               (4,335)
                                      ------                ------  
INVESTING ACTIVITIES:
     Capital expenditures             (1,164)                 (533)
     Additional consideration 
          for Softworks acquisition     (486)                 (368)
     Proceeds from the sale of 
          technology                     -                     350
     Proceeds from the sale of 
          net assets of subsidiary       230                    -
     Capitalization of software 
          development costs             (525)                 (332)
     Net change in advances to 
          officers                      (179)                 (185)
                                      ------                ------  
       Net cash used in investing 
          activities                  (2,124)               (1,068)
                                      ------                ------  

<PAGE>

FINANCING ACTIVITIES:
    Net proceeds from sales of 
          common stock, options  
          and convertible 
          debentures                   6,164                11,976
    Net change in long-term debt        (243)                 (233)
                                      ------                ------  
       Net cash provided by 
          financing activities         5,921                11,743
                                      ------                ------  
DECREASE (INCREASE)  IN CASH 
    AND CASH EQUIVALENTS              (2,075)                6,340
CASH AND CASH EQUIVALENTS, 
    beginning of period                5,675                   579
                                      ------                ------  
CASH AND CASH EQUIVALENTS, 
    end of period                     $3,600                $6,919
                                      ======                ======  

            See Notes to Condensed Consolidated Financial Statements
</TABLE>

<PAGE>


                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
         For the Three and Nine Months Ended September 30, 1997 and 1996

       1.   INTERIM  FINANCIAL INFORMATION

     The condensed  consolidated balance sheet as of September 30, 1997, and the
condensed  consolidated  statements of operations  for the three and nine months
ended  September  30, 1997,  and 1996,  and cash flows for the nine months ended
September 30, 1997, and 1996,  have been prepared by the Company  without audit.
These interim financial  statements include all adjustments,  consisting only of
normal  recurring  accruals,  which  management  considers  necessary for a fair
presentation of the financial  statements for the above periods.  The results of
operations  for the three and nine months  ended  September  30,  1997,  are not
necessarily  indicative  of results that may be expected  for any other  interim
periods or for the full year.

     These  condensed  consolidated  financial  statements  should  be  read  in
conjunction with the consolidated financial statements and notes thereto for the
year ended  December 31, 1996.  The  accounting  policies  used in preparing the
condensed  consolidated financial statements are consistent with those described
in the December 31, 1996, consolidated financial statements.

       2.   BASIS OF PRESENTATION

     Computer Concepts Corp. and subsidiaries (the "Company")  design,  develop,
market and support  information  delivery software products,  including end-user
data access tools for use in personal computer and  client/server  environments,
and systems management  software products for corporate  mainframe data centers.
The Company has  recently  entered  into the  Information  Services / technology
infrastructure  service business.  The Company's  principal market is the United
States.  Overseas revenues are principally  generated from European subsidiaries
and distributors.

     The Company has  incurred  consolidated  net losses of  $4,780,000  for the
three months ended  September  30, 1997,  $12,999,000  for the nine months ended
September 30, 1997, and cumulative net losses of $82,355,000  through  September
30,  1997.  Further,  the  Company  has  incurred  consolidated  net  losses  of
$18,953,000,  $18,365,000  and  $12,207,000  during the years ended December 31,
1996,  1995, and 1994,  respectively.  For the nine month period ended September
30, 1997, net cash used in operating  activities was $5,872,000,  reflecting the
above net loss being offset by various  non-cash items and changes in assets and
liabilities described in the accompanying  condensed  consolidated  statement of
cash flows.  The Company's cash  requirements  were primarily  financed  through
current and prior year sales of  convertible  debentures,  sales of common stock
and funds generated from Softworks' operations.

     The  Company  does not  maintain  a  credit  facility  with  any  financial
institution.  The Company  has  continued  to incur  significant  expenses  with
respect to the development and marketing of its d.b.Express  product  technology
without generating any significant  revenues. As a result of continued operating
losses,  the use of  significant  cash in operations  and the lack of sufficient
funds to execute its business plan,  among other  matters,  there is substantial
doubt about the Company's ability to continue as a going concern. No adjustments
have been made with respect to the condensed  consolidated  financial statements
to record the results of the ultimate outcome of this uncertainty.

     Management's  plans to remain a going concern,  as more fully  described in
these notes,  require  additional  financing  until such time as sufficient cash
flows are generated from operations.  During the nine months ended September 30,
1997, the Company received  approximately  $3,865,000 (less commissions and fees
of  approximately  $484,000)  from  the  sale  of  convertible  debentures,  and
$3,000,000  (less  commissions  and fees of  $240,000)  from the sale of  common
stock. See Note 3.a. to the condensed consolidated financial statements.

<PAGE>

                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
   (Unaudited) For the Three and Nine Months Ended September 30, 1997 and 1996

       2.   BASIS OF PRESENTATION (Continued)

     There  can be no  assurances  that  the  Company  will be  able  to  obtain
sufficient  financing to execute its business plan. The Company's primary source
of revenue continues to be derived from its Softworks  subsidiary.  Management's
plans to remain a going  concern rely upon  achieving  positive  cash flows from
operations  through  the  continued  growth  of  Softworks  and  the  successful
exploitation of the Company's d.b.Express product.  While to date, revenues from
d.b.Express have been  insignificant,  management  believes that its proprietary
software  technology  has  significant  potential in several  areas,  and solves
certain  significant  business  issues in the  telecommunications  and  internet
related markets.  In order to realize the potential of this product,  management
will need to  aggressively  pursue all  marketing  opportunities.  To date,  the
Company  has  incurred  significant  losses  (both cash  expenses  and  non-cash
expenses) as a result of the development and marketing of d.b.Express. There can
be no assurances that the Company will be successful in achieving  positive cash
flows from  operations  with  respect to the  d.b.Express  product.  The Company
continues to pursue license and development  agreements with various  companies.
While none of the Company's  existing  agreements or development  opportunities,
that relate to d.b.Express, provide sales commitments,  management believes that
the  successful  exploitation  of its  d.b.Express  technology,  as  well as the
continued  growth of Softworks,  will  eventually  enable the Company to achieve
positive  cash  flows  from  operations.   Unless  the  Company   determines  to
discontinue  its pursuit of d.b.Express  revenues  (which  requires  significant
financial resources), the Company will need to generate positive cash flows from
operations  from the sale of  d.b.Express  product  in  order  to  decrease  its
dependency on cash flows from  financing  activities and remain a going concern.
At November 10, 1997, the Company had cash and cash equivalents of approximately
$1,674,000.  Ultimately,  however,  positive cash flows from  operations will be
necessary in order to curtail the Company's reliance on equity placements.


       3.   SHAREHOLDERS' EQUITY

     a. Sales of Common Stock and Convertible Debentures

     During the quarter ended June 30, 1997,  the Company  raised  approximately
$3,865,000  (less  commissions and fees of approximately  $484,000)  through the
sale of non-interest  bearing  convertible  debentures.  These  debentures had a
maturity date in May, 1998, and were  convertible,  at the option of the holder,
commencing  45 days from the date of issue into  restricted  common stock of the
Company.  The  convertible  debentures  had an assured  discount of 25% from the
prices of the Company's common stock at various defined  periods.  In connection
with this discount, SEC Staff comments and consistent with SEC observer comments
at the  Emerging  Issues Task Force  meeting on March 13,  1997  related to this
topic,  the Company  recorded a deferred asset of $1,288,000 upon the receipt of
the funds and amortized this discount  amount over the period  commencing on the
date  the  security  was  issued  to  the  date  it  first  became  convertible.
Accordingly,  the Company  recorded a non-cash  interest charge related to these
securities  of  $1,288,000.  During the quarter ended  September  30, 1997,  the
entire amount of the debentures,  $3,865,000, had converted into an aggregate of
11,982,343 shares of the Company's common stock and has, accordingly,  increased
the Company's shareholders' equity by an equal amount.

<PAGE>

                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)
        For the Three and Nine Months Ended September 30, 1997 and 1996


       3.   SHAREHOLDERS' EQUITY (Continued)

     Additionally,  during the quarter  ended  September  30, 1997,  the Company
consummated  a sale of  restricted  common  stock under a private  placement  to
accredited  United States  investors under Regulation D. Proceeds from this sale
were  $3,000,000   (less   commissions  and  fees  of  $240,000).   A  total  of
approximately  4,615,000  shares  were  sold  at a price  of  $0.65  per  share.
Additional  shares may be  required  to be issued  under a  valuation  guarantee
should the closing bid price of the  Company's  common  stock,  as stated on The
Nasdaq SmallCap Market,  not exceed an average of $0.78 for any five consecutive
trading days during the thirty days immediately  following the effective date of
a Registration Statement.

     During  the nine  month  period  ended  September  30,  1997,  the  Company
consummated  sales of 85,250 shares of common stock  resulting from the exercise
of stock options. Proceeds raised from these sales aggregated $23,000.

     b. Stock Compensation Awards and Repricing of Options

     During the nine month period ended  September 30, 1997,  the Company issued
6,945,400   shares  of  common   stock,   6,145,400  of  which  are  subject  to
registration,  to officers,  employees and outside consultants. The shares had a
fair value (adjusted for the value of 2,000,000 canceled options) on the date of
issuance of approximately  $2,477,000 and,  accordingly,  the Company recorded a
non-cash compensation charge of approximately $2,477,000.  Further, 2,500,000 of
these shares are subject to forfeiture based upon specified Company  performance
criteria. Additionally, for the nine months ended September 30, 1997, in lieu of
cash compensation to various officers,  employees and consultants, the Company's
Board of Directors  authorized  a reduction  of the exercise  price of 3,915,000
outstanding  options to purchase the  Company's  common stock to prices  ranging
from  $0.01 to $1.00 per share.  The  options  originally  had  exercise  prices
ranging  from  $0.50 to $1.50  per  share.  Accordingly,  the  Company  recorded
non-cash   charges  of  approximately   $1,271,000  for  employee   compensation
(calculated  using the intrinsic  method) and  consulting  services  (calculated
using the fair value method). The Company also recorded a non-cash  compensation
charge of $18,000  for  options  granted to two key  employees  as part of their
employment contract agreements.

     c.  Subsequent Event

     During October,  1997, the Company issued  1,147,652  restricted  shares of
common stock to HPS America,  Inc. ("HPS") for settlement of product development
costs aggregating $860,739 owed to HPS and its affiliates. Additional shares may
be required to be issued  should the net proceeds  from the sale of these shares
not equal  $0.75 per  share.  In the event  the net  proceeds  exceed  the gross
valuation  amount,  $860,739,  then the  Company  shall be  entitled to either a
credit to be applied against  potential future HPS invoices or the return to the
Company of 75% of the excess  proceeds  (as  determined  by the per share  sales
price in excess of $.75).

<PAGE>

                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
         For the Three and Nine Months Ended September 30, 1997 and 1996



     4.  SALE OF NET ASSETS OF SUBSIDIARY

     In July,  1997,  the Company  completed a transaction  in which it sold all
rights to the underlying software  technologies of its Maplinx, Inc. subsidiary.
Further,  as part of the  transaction,  the  purchaser  acquired all of Maplinx'
current  assets  and  assumed  all  of  its  liabilities.  The  sales  price  of
approximately  $850,000 was adjusted (reduced) by the excess of Maplinx' current
liabilities  over current assets  (approximately  $380,000),  resulting in a net
sales price of $470,000. Approximately $235,000 was paid at closing, the balance
of $235,000 plus  interest is due six months from  closing.  As a result of this
transaction, the Company recognized a gain on the sale of net assets of $813,000
in the quarter ended September 30, 1997.


5.  COMMITMENTS AND CONTINGENCIES

a.   Contingent Consideration

     In  connection  with the 1993  acquisition  of  Softworks,  the  Company is
required to make additional  payments to two of Softworks' former  shareholders,
based upon certain  product  revenues for the years 1995 through  1998,  up to a
maximum of $1,000,000  each,  for an aggregate  maximum of  $2,000,000.  Through
September  30,  1997,  the  Company  has  incurred  an  aggregate  liability  of
$1,409,000,  (of which  $1,289,000  has been  paid) to the  non-employee  former
shareholders,  which has been treated as additional  consideration in connection
with the acquisition, and, accordingly,  included in the excess of cost over the
fair value of net assets acquired,  as these individuals did not continue in the
employment of the Company  subsequent to the  acquisition.  No other  contingent
payments have been made under the terms of this agreement.

b.   Registration Statements/Restricted Securities

     The Company has used  restricted  common  stock for the purchase of certain
companies, has sold restricted common stock in private placements and has issued
restricted  common  stock as  compensation  to  employees  and  certain  outside
consultants. At September 30, 1997, 16,168,000 shares of restricted common stock
are issued and outstanding.

c.   Legal Matters

     In July, 1995, the Company and certain officers received  notification that
they  have  been  named as  defendants  in a class  action  claim in  regard  to
announcements  and  statements  regarding the  Company's  business and products.
During August and September,  1995, four  additional,  substantially  identical,
class action  claims were made.  In November,  1995,  the five  complaints  were
consolidated  into one action.  Plaintiffs  have moved to certify a class action
and the Company did not oppose the motion.  In July, 1997, in an effort to avoid
the  expense  of  and  resolve  the  uncertainty  of  litigation,   the  Company
tentatively  agreed to a Stipulation  and Agreement of Settlement  ("Stipulation
Agreement") of this class action.  The Company  continues to deny any wrongdoing
with  respect to this  action and seeks to settle to avoid  further  substantial

<PAGE>

                COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              (Unaudited)
       For the Three and Nine Months Ended September 30, 1997 and 1996


5.   COMMITMENTS AND CONTINGENCIES  (Continued)

expense,  inconvenience and risk. The plaintiff's counsel is presently providing
notice of the action and the proposed settlement to the class members. A hearing
is scheduled for December 12, 1997 ("Settlement  Hearing"),  at which time it is
contemplated  that the Court will enter a final order  approving  the  following
terms of the  settlement.  If approved,  the Company will deliver and place into
escrow  1,000,000  shares of its common  stock.  In the event  that the  average
closing bid price of the  Company's  common stock for the ten trading days prior
to the Settlement  Hearing is less than $0.50 per share,  the Company will issue
additional  shares,  determined by dividing $500,000 by the ten day average less
the shares  already placed into escrow.  Further,  the Company and its insurance
carrier will each deposit into escrow $350,000,  totaling  $700,000.  Based upon
the  Stipulation  Agreement,  the Company had recorded in the quarter ended June
30, 1997, an $850,000 Unusual Charge to earnings.

     d.   Software Distribution Agreement

     In July 1997,  the Company  acquired from  Cognizant  Technology  Solutions
Corporation ("CTS") the generally exclusive worldwide rights to two technologies
(the  "Technology")  that  complement  the Company's  existing Year 2000 product
solutions.  Pursuant to the software distribution agreement, in exchange for the
Technology  rights, the Company is required to pay CTS a royalty on sales of the
Technology  at defined  rates  subject to minimum  annual  royalties as follows:
$100,000 in 1997, $900,000 in 1998, $1,400,000 in 1999 and $400,000 in 2000.


<PAGE>

      COMPUTER CONCEPTS CORP. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND
           ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        For the Three and Nine Months Ended September 30, 1997 and 1996

Business Description
--------------------

     Computer Concepts Corp. and subsidiaries (the "Company")  design,  develop,
market and support  information  delivery software products,  including end-user
data access tools for use in personal  computer and  client/server  environments
and systems management  software products for corporate  mainframe data centers.
The Company has  recently  entered  into the  Information  Services / technology
infrastructure  service business.  The Company's  principal market is the United
States.  Overseas revenues are principally  generated from European subsidiaries
and distributors.

     The Company  currently  consists of three operating units or product lines:
d.b.Express,  Softworks,  and a newly formed business unit. d.b.Express provides
businesses  with  a  simple,  fast,  low-cost  method  of  finding,  organizing,
analyzing and using information  contained in databases through a visually-based
proprietary  software  tool.  Softworks  provides  systems  management  software
products  that  optimize   mainframe   system   performance,   reduce   hardware
expenditures,   and  enhance  the  reliability  and  availability  of  the  data
processing environment.  Products marketed by Softworks include technology which
addresses  the year 2000  problem.  During the nine months ended  September  30,
1997, the Company commenced  operations of a new business unit which is designed
to provide a wide array of  information  technology,  support and services.  The
Company has employed an individual,  formerly with I.B.M.,  having  expertise in
this field and intends to capitalize on his  experience  and competency in order
to create a unique,  single  management  infrastructure  to support an extensive
selection of services and vendors.  The  Company's  new business line will offer
solutions,  support,  and  strategies to solve various  business  crises in such
areas as: network determinations,  help desk applications,  wiring/cabling,  LAN
connections,  moves/adds/changes,  and  project  management.  Additionally,  the
Company will oversee new  installations  as well as offering  on-site  component
repair.  The method of revenue  recognition  will be dependent upon the type and
manner of service provided.

Results of Operations
---------------------

Three and Nine Months Ended September 30, 1997 Compared with September 30, 1996
-------------------------------------------------------------------------------

     Revenues for the quarter ended  September  30, 1997,  were  $6,657,000,  an
increase of $2,344,000  over revenues for the quarter ended  September 30, 1996,
while for the nine months ended September 30, 1997, and 1996, revenues increased
$7,787,000 from $12,144,000 to $19,931,000.  For the quarter ended September 30,
1997,  net revenues  increased at Softworks by  $2,816,000,  while  decreases in
revenues of $472,000 resulted primarily from the closure of certain subsidiaries
and product  lines.  Year to date  increases of  $7,138,000  and  $1,432,000  at
Softworks  and  Computer  Concepts  respectively,  were offset by  decreases  of
$783,000  from the  closure of  certain  subsidiaries  and  product  lines.  The
increase  in  revenues  at  Softworks  is due  primarily  to the  release of new
products  and expanded  sales and  marketing  efforts.  The increase at Computer
Concepts  is  principally  due to the  revenues  generated  from its new special
services division.

     The cost of revenues and technical support increased $471,000 to $1,825,000
for the quarter ended  September  30, 1997,  as compared to  $1,354,000  for the
prior year quarter and by  $3,075,000  to  $7,046,000  for the nine months ended
September 30, 1997,  from  $3,971,000 for the prior year nine month period.  The
principal  factors for these increases  include the release of new product lines
and added technical  support for the additional  sales at Softworks at Softworks
as well as the  costs  associated  with the new  special  services  division  at
Computer Concepts.
<PAGE>

                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

         For the Three and Nine Months Ended September 30, 1997 and 1996

Three and Nine Months Ended  September 30, 1997 Compared with September 30,
1996 (Continued)

     Research and  development  costs  increased  $926,000 to $1,254,000 for the
quarter ended September 30, 1997 from, $328,000 for the prior year quarter,  and
increased $1,901,000 to $2,905,000 for the nine months ended September 30, 1997,
from  $1,004,000  for the prior  year nine month  period.  R&D  activities  were
devoted  to  further  develop  current  product  technologies,  as  well  as the
development of technologies pertaining to the Year 2000 problem.

     Sales and marketing  expenses  increased  approximately  $3,205,000 for the
quarter ended  September 30, 1997, to $5,744,000  from  $2,539,000 for the prior
year.  This  increase is primarily  due to Softworks'  domestic  expansion,  the
creation of additional international  subsidiaries and its efforts to market and
promote Year 2000  technologies.  Additional  expenses incurred were a result of
increased  efforts to market d.b.Express TM.  For the nine month  period  ended
September 30, 1997,  expenses  increased  when compared to the nine months ended
September  30, 1996 by  $5,908,000, primarily due to factors mentioned above.

     General and  administrative  costs increased $792,000 to $2,413,000 for the
three months ended  September  30, 1997,  when  compared to  $1,621,000  for the
quarter ended  September 30, 1996,  and by $2,004,000 to $7,119,000 for the nine
months ended  September  30,1997 from $5,115,000 for the nine month period ended
September 30, 1996. The principal  factors  contributing  to these increases has
been the additional  overhead  costs  associated  with the increased  efforts to
market d.b.Express and technologies associated with the Year 2000 problem, along
with  non-cash  compensation  awards  made to certain  officers,  employees  and
consultants.

     See Note  3.a.  to the  condensed  consolidated  financial  statements  for
discussion  relating to the non-cash  interest charge pertaining to the discount
on convertible debentures.

     See  Note  5.c to  the  condensed  consolidated  financial  statements  for
discussion relating to the unusual charges incurred during the nine months ended
September 30, 1997. For the quarter ended March 31, 1996,  the Company  recorded
an unusual  charge to earnings of  $2,075,000  as a result of a settlement  of a
class action suit.


Financial Condition and Liquidity

     The Company has  incurred  consolidated  net losses of  $4,780,000  for the
three months ended  September  30, 1997,  $12,999,000  for the nine months ended
September 30, 1997, and cumulative net losses of $82,355,000  through  September
30,  1997.  Further,  the  Company  has  incurred  consolidated  net  losses  of
$18,953,000,  $18,365,000  and  $12,207,000  during the years ended December 31,
1996,  1995, and 1994,  respectively.  For the nine month period ended September
30, 1997, net cash used in operating  activities  was $5,872,000  reflecting the
above net loss being offset by various  non-cash items and changes in assets and
liabilities described in the accompanying  condensed  consolidated  statement of
cash flows.  The Company's cash  requirements  were primarily  financed  through
current and prior year sales of  convertible  debentures,  sales of common stock
and funds generated from Softworks' operations.

     The  Company  does not  maintain  a  credit  facility  with  any  financial
institution.  The Company  has  continued  to incur  significant  expenses  with
respect to the development and marketing of its d.b.Express  product  technology
without generating any significant  revenues. As a result of continued operating
losses,  the use of  significant  cash in operations  and the lack of sufficient
funds to execute its business plan,  among other  matters,  there is substantial
doubt about the Company's ability to continue as a going concern. No adjustments
have been made with respect to the condensed  consolidated  financial statements
to record the  results of the  ultimate  outcome of this  uncertainty. 

<PAGE>


                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

         For the Three and Nine Months Ended September 30, 1997 and 1996


Financial Condition and Liquidity (Continued)

     Management's  plans to remain a going concern,  as more fully  described in
these notes,  require  additional  financing  until such time as sufficient cash
flows are generated from operations.  During the nine months ended September 30,
1997, the Company received  approximately  $3,865,000 (less commissions and fees
of $484,000)  from the sale of  convertible  debentures,  and  $3,000,000  (less
commissions  and fees of $240,000) from the sale of common stock.  See Note 3.a.
to the condensed consolidated financial statements.

     There  can be no  assurances  that  the  Company  will be  able  to  obtain
sufficient  financing to execute its business plan. The Company's primary source
of revenue continues to be derived from its Softworks  subsidiary.  Management's
plans to remain a going  concern rely upon  achieving  positive  cash flows from
operations  through  the  continued  growth  of  Softworks  and  the  successful
exploitation of the Company's d.b.Express product.  While to date, revenues from
d.b.Express have been  insignificant,  management  believes that its proprietary
software  technology  has  significant  potential in several  areas,  and solves
certain  significant  business  issues in the  telecommunications  and  internet
related markets.  In order to realize the potential of this product,  management
will need to  aggressively  pursue all  marketing  opportunities.  To date,  the
Company  has  incurred  significant  losses  (both cash  expenses  and  non-cash
expenses) as a result of the development and marketing of d.b.Express. There can
be no assurances that the Company will be successful in achieving  positive cash
flows from  operations  with  respect to the  d.b.Express  product.  The Company
continues to pursue license and development  agreements with various  companies.
While none of the Company's  existing  agreements or development  opportunities,
that relate to d.b.Express, provide sales commitments,  management believes that
the  successful  exploitation  of its  d.b.Express  technology,  as  well as the
continued  growth of Softworks,  will  eventually  enable the Company to achieve
positive  cash  flows  from  operations.   Unless  the  Company   determines  to
discontinue  its pursuit of d.b.Express  revenues  (which  requires  significant
financial resources), the Company will need to generate positive cash flows from
operations  from the sale of  d.b.Express  product  in  order  to  decrease  its
dependency on cash flows from  financing  activities and remain a going concern.
At November 10, 1997, the Company had cash and cash equivalents of approximately
$1,674,000.  Ultimately,  however,  positive cash flows from  operations will be
necessary in order to curtail the Company's reliance on equity placements.

     In  connection  with the 1993  acquisition  of  Softworks,  the  Company is
required to make additional  payments to two of Softworks' former  shareholders,
based upon certain  product  revenues for the years 1995 through  1998,  up to a
maximum of $1,000,000  each,  for an aggregate  maximum of  $2,000,000.  Through
September  30,  1997,  the  Company  has  incurred  an  aggregate  liability  of
$1,409,000,  (of which  $1,289,000  has been  paid) to the  non-employee  former
shareholders,  which has been treated as additional  consideration in connection
with the acquisition, and, accordingly,  included in the excess of cost over the
fair value of net assets acquired,  as these individuals did not continue in the
employment of the Company  subsequent to the  acquisition.  No other  contingent
payments have been made under the terms of this agreement.

     In July,  1997,  the Company  completed a transaction  in which it sold all
rights to the underlying software  technologies of its Maplinx, Inc. subsidiary.
Further,  as part of the  transaction,  the  purchaser  acquired all of Maplinx'
current  assets  and  assumed  all  of  its  liabilities.  The  sales  price  of
approximately  $850,000 was adjusted (reduced) by the excess of Maplinx' current
liabilities  over current assets  (approximately  $380,000),  resulting in a net
sales price of $470,000. Approximately $235,000 was paid at closing, the balance
of $235,000 plus  interest is due six months from  closing.  As a result of this
transaction, the Company recognized a gain on the sale of net assets of $813,000
in the quarter ended September 30, 1997.

<PAGE>

                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

         For the Three and Nine Months Ended September 30, 1997 and 1996

Financial Condition and Liquidity (Continued)

     The Company is a defendant in several  lawsuits  and class  action  claims.
Based on consultation  with legal counsel,  the Company and its officers believe
that meritorious  defenses exist regarding the lawsuits and claims, and they are
vigorously  defending against the allegations.  The Company is unable to predict
the ultimate  outcome of the claims,  which could have a material adverse effect
on the consolidated financial position and results of operations of the Company.
Accordingly,  except as expressly discussed herein, the financial  statements do
not reflect any adjustments that might result from the ultimate outcome of these
litigation matters.

     Softworks  sells  perpetual  and  fixed  term  licenses  for its  mainframe
products,  for  which  extended  payment  terms of three  to five  years  may be
offered.  In the case of  extended  payment  term  agreements,  the  customer is
contractually  bound to equal  annual  fixed  payments.  The first  year of post
contract customer support (PCS) is bundled with standard license agreements. In
the case of extended payment term  agreements,  PCS is bundled for the length of
the payment term. Thereafter,  in both instances,  the customer may purchase PCS
annually. At September 30, 1997, the amount of such future receivables extending
beyond one year was  approximately  $6,980,000,  and is included in  installment
accounts receivable, due after one year and deferred revenues.


<PAGE>

                    COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                           PART II - OTHER INFORMATION

    For the Three and Nine Months Ended September 30, 1997 and 1996


Item 1.  Legal Proceedings
 See Note 5.c. to the Condensed Consolidated Financial Statements.

Item 2.  Changes in Securities
 Not applicable.

Item 3.  Defaults Upon Senior Securities
 Not applicable.

Item 4.  Submission of Matters to a Vote of Security Holders
 Not Applicable

Item 5.  Other Information
 Not Applicable

Item 6. Exhibits and Reports on Form 8-K The Company  filed the  following  Form
8-Ks:

  May 23, 1997    Item 9 - Sale of equity securities pursuant to Regulation S
  May 29, 1997    Item 4 - Dismissal of  independent auditors
  June 3, 1997    Item 4 - Engagement of new independent auditors.



<PAGE>


        ______________________________________________________

No  dealer,  salesperson  or any other  person has been  authorized  to give any
information  or to make any  representations  in  connection  with this offering
other  than  those   contained   in  this   Prospectus.   Any   information   or
representations not herein contained,  if given or made, must not be relied upon
as having been authorized by the Company. This Prospectus does not constitute an
offer to sell or a  solicitation  of an offer to buy any security other than the
securities  offered by this Prospectus,  nor does it constitute an offer to sell
or a  solicitation  of an  offer  to buy the  securities  by any  person  in any
jurisdiction where such offer or solicitation is not authorized, or in which the
person  making such offer is not qualified to do so, or to any person to whom it
is unlawful to make such offer or solicitation.  The delivery of this Prospectus
shall not, under any circumstances create any implication that there has been no
change in the affairs of the Company since the date hereof.

        ______________________________________________________

                                TABLE OF CONTENTS

                                                               Page
                                                               ----   

Reports to Security Holders ................................    2
Available Information ......................................    2
Prospectus Summary .........................................    3
Risk Factors ...............................................    7
Dividend Policy ............................................   11
Capitalization .............................................   11
Selected Financial Data ....................................   12
Management's Discussion and Analysis .......................   13
Business ...................................................   19
Management .................................................   30
Certain Transactions .......................................   36
Security Ownership of Certain Beneficial
  Owners and Management ....................................   37
Selling Security holders ...................................   38
Plan of Distribution .......................................   46
Shares Eligible for Future Sale ............................   47
Description of Securities ..................................   48
Legal Matters ..............................................   49
Experts ....................................................   49
Index to Financial Statements ..............................   50
Financial Statements .......................................   F-1


Until ____________ (25 days after the commencement of the offering), all dealers
effecting  transactions  in the  Shares,  whether or not  participating  in this
distribution, may be required to deliver a Prospectus. This delivery requirement
is in addition to the obligation of dealers to deliver a Prospectus  when acting
as Underwriters and with respect to their unsold allotments or subscriptions.

        ______________________________________________________


                                11,747,318 Shares
                                 of Common Stock


                             COMPUTER CONCEPTS CORP.



                                  _____________


                                   PROSPECTUS

                                  _____________






                                January ___, 1998
                           
<PAGE>

                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS


Item 14. Other Expenses of Issuance and Distribution

        The estimated expenses of the distribution, all of which are to be borne
by the Company, are as follows:
<TABLE>

<S>                                          <C>     
SEC Registration Fee (Previously paid) ...   $  1,625
Blue Sky Fees and Expenses ...............     15,000
Legal Fees and Expenses ..................     15,000
Accounting Fees and Expenses .............     15,000
Printing Expenses ........................     25,000
Miscellaneous ............................     23,375
                                             --------
      Total ..............................   $ 95,000
</TABLE>

Item 15. Indemnification of Directors and Officers

     See "Management - Personal Liability and Indemnification of Directors".

Item 16. Recent Sales of Unregistered Securities

     The following discussion sets forth all sales of unregistered securities by
the  Company   during  the  last  three  years.   No  sales  were  made  through
underwriters,  and unless  otherwise  noted,  all securities sold were shares of
Common Stock:

1994
     During 1994, in an offering to 34 accredited investors,  the Company issued
an aggregate of 2,069,000 shares of its Common Stock pursuant to Regulation D of
the Act for an aggregate offering price of $1,214,000 with commissions and costs
of the offering aggregating  approximately  $200,000 of that amount. The Company
also  issued  600,000  shares of its Common  Stock upon the  exercise in 1994 of
options  exercisable at $.01 per share  previously  issued to two consultants as
compensation   for   services   rendered.   Each  of  the   investors   provided
representations  confirming  their status as accredited  investors.  The Company
claims  exemption for the foregoing  issuances of its Common Stock under the Act
by virtue of Section 4(2) as transactions not involving a public offering.  Each
of the persons  acquiring  such  securities  represented  in writing that he was
acquiring such  securities for investment and not with a view to distribution to
the  public.  All of the  securities  were  issued  with  a  restrictive  legend
regarding  transfer,  and  stop-transfer  orders  were  given  to the  Company's
transfer  agent in  connection  with the Common  Stock so  issued.  There was no
public  advertising,   and  each  of  the  purchasers  had  access  to  complete
information regarding the business of the Company.

     Also in the  second  quarter  of  1994,  in  off-shore  transactions  in an
offering to two non-United  States persons who were also  accredited  investors,
the Company issued an aggregate of 2,520,000 shares of its Common Stock pursuant
to Regulation S of the Act for an aggregate  offering price of $1,587,500,  with
commissions and costs of the offering aggregating approximately $190,000 of that
amount.  The Company claims  exemption for the foregoing  issuance of its Common
Stock  under the Act by virtue of  Sections  901,  et seq.  of  Regulation  S as
promulgated  under the Act,  and also by virtue  of  Section  4(2) of the Act as
transactions not involving a public offering. Each of the persons acquiring such
securities  represented  in writing that he was acquiring  such  securities  for
investment and not with a view to  distribution to the public and also confirmed
their non U.S. Person status (as defined in Regulation S). All of the securities
were issued with a restrictive  legend  regarding  transfer,  and  stop-transfer
orders were given to the Company's  transfer agent in connection with the Common
Stock so issued. There was no public advertising, and each of the purchasers had
access to complete information regarding the business of the Company.
<PAGE>

     During  1994,  the  Company  acquired  three  computer  software  companies
(MapLinx,  DBopen and CCEL) and computer software technology assets (Superbase).
In  conjunction  with these  acquisitions,  the Company  issued an  aggregate of
7,979,000  shares  of its  Common  Stock,  including  175,000  shares  issued as
finder's fees and 267,000  shares issued as the result of the Company's  failure
to timely effect the registration of shares issued to the seller of the software
technology asset. In conjunction with the acquisition of that asset, the Company
agreed to a penalty  provision  requiring  payment of a penalty and  issuance of
additional  shares  in the  event  the  Company  failed  to  effect  the  timely
registration  of the sellers Common Stock.  In the  transactions  to acquire the
three  companies,  the Company's Common Stock was issued in exchange for 100% of
the securities of each of the three companies.  The Company claims exemption for
the  foregoing  issuance of its Common  Stock under the Act by virtue of Section
4(2) as  transactions  not  involving  a public  offering.  Each of the  persons
acquiring  such  securities  represented  in writing that he was acquiring  such
securities for investment and not with a view to distribution to the public. All
of the securities were issued with a restrictive legend regarding transfer,  and
stop-transfer  orders were given to the Company's  transfer  agent in connection
with the Common Stock so issued.  There was no public  advertising,  and each of
the purchasers had access to complete information  regarding the business of the
Company.

     The Company also issued 375,000 shares or options exercisable for shares of
its Common Stock as compensation  to employees and consultants  during 1994. The
Company claims  exemption for the foregoing  issuances of its Common Stock under
the Act by  virtue  of  Section  4(2) as  transactions  not  involving  a public
offering.  Each of the persons acquiring such securities  represented in writing
that he was acquiring  such  securities  for  investment  and not with a view to
distribution to the public. All of the securities were issued with a restrictive
legend regarding transfer,  and stop-transfer orders were given to the Company's
transfer  agent in  connection  with the Common  Stock so  issued.  There was no
public  advertising,   and  each  of  the  purchasers  had  access  to  complete
information regarding the business of the Company.

1995

     During  the  first  and  second  quarters  of  1995,  in two  offerings  to
thirty-seven accredited investors,  the Company issued an aggregate of 5,800,279
shares of its Common Stock  pursuant to Regulation D of the Act for an aggregate
offering  price of  $3,125,415,  with  commissions  and  costs  of the  offering
aggregating  approximately  $629,677 of that  amount.  In  December of 1995,  an
employee of the Company  paid $12,500 to exercise  options for 25,000  shares of
Common Stock. Each of the investors  provided  representations  confirming their
status as accredited  investors.  The Company claims exemption for the foregoing
issuances  of its  Common  Stock  under  the Act by virtue  of  Section  4(2) as
transactions not involving a public offering. Each of the persons acquiring such
securities  represented  in writing that he was acquiring  such  securities  for
investment  and  not  with a view  to  distribution  to the  public.  All of the
securities  were  issued  with a  restrictive  legend  regarding  transfer,  and
stop-transfer  orders were given to the Company's  transfer  agent in connection
with the Common Stock so issued.  There was no public  advertising,  and each of
the purchasers had access to complete information  regarding the business of the
Company.

     Also in the first and second quarters of 1995, in off-shore transactions in
two  offerings  to twenty  non-United  States  persons who were also  accredited
investors,  the Company  issued an aggregate of 14,761,712  shares of its Common
Stock  pursuant to  Regulation S of the Act for an aggregate  offering  price of

<PAGE>

$6,680,000,   with   commissions   and  costs  of  the   offerings   aggregating
approximately  $797,600  of that  amount.  Also,  in  December  of  1995,  in an
off-shore  offering to two non-United  States  persons who were also  accredited
investors, the Company issued an aggregate of 300,000 shares of its Common Stock
pursuant to Regulation S of the Act for an aggregate offering price of $450,000,
with no commissions or expenses of sale.
 The Company  claims  exemption for the  foregoing  issuance of its Common Stock
under the Act by virtue of Sections 901, et seq. of Regulation S as  promulgated
under the Act, and also by virtue of Section 4(2) of the Act as transactions not
involving a public  offering.  Each of the  persons  acquiring  such  securities
represented in writing that he was acquiring such  securities for investment and
not with a view to  distribution to the public and also confirmed their non U.S.
Person status (as defined in Regulation  S). All of the  securities  were issued
with a restrictive  legend regarding  transfer,  and  stop-transfer  orders were
given to the Company's  transfer  agent in  connection  with the Common Stock so
issued.  There was no public advertising,  and each of the purchasers had access
to complete information regarding the business of the Company.

     The  Company  also  issued   2,137,000   shares  of  its  Common  Stock  as
compensation  to employees and  consultants  and 219,000 shares as settlement of
trade  payables  during 1995.  The Company  claims  exemption  for the foregoing
issuances  of its  Common  Stock  under  the Act by virtue  of  Section  4(2) as
transactions not involving a public offering. Each of the persons acquiring such
securities  represented  in writing that he was acquiring  such  securities  for
investment  and  not  with a view  to  distribution  to the  public.  All of the
securities  were  issued  with a  restrictive  legend  regarding  transfer,  and
stop-transfer  orders were given to the Company's  transfer  agent in connection
with the Common Stock so issued.  There was no public  advertising,  and each of
the purchasers had access to complete information  regarding the business of the
Company.

1996

     On January 24, 1996, the Company  completed an off-shore  offering to three
non-United States persons who were also accredited investors,  of 425,000 shares
of restricted common stock under three private placements. On February 23, 1996,
the Company  completed a second  off-shore  offering to five  non-United  States
persons who were also  accredited  investors,  of 590,000  shares of  restricted
common stock under five  private  placements.  Proceeds  raised from these sales
aggregated $1,750,000, net of offering commissions and expenses of approximately
$280,000. A total of 1,015,000 shares were sold at $2.00 per share. On March 18,
1996, an additional $1,700,000 (net of commissions and expenses of approximately
$300,000) was raised from the sale of 13% convertible debentures to one non-U.S.
investor.  Such debentures were converted at the option of the holder,  into the
restricted common stock of the Company at a conversion rate of 67.5% of the fair
market  value  of the  Company's  common  stock  for  the  principal  amount  of
$2,000,000 plus accrued interest, in May of 1996 into 2,473,837 shares. On April
15, 1996, $3,000,000 (before commissions and expenses of approximately $300,000)
was raised from the sale of 5% convertible debentures to one non-U.S.  investor,
$250,000 of which was converted into 250,000 shares on June 10, 1996, $1,000,000
of which was converted into 1,162,790 shares on July 2, 1996, and the balance of
$1,750,000 of which was converted into 2,011,494  shares on July 3, 1996, all at
a conversion rate of 75% of the fair market value of the Company's  common stock
at the  time  of  conversion.  The  Company  placed  another  $3,000,000  of 13%
Convertible   Debentures  (before  commissions  and  expenses  of  approximately
$194,000) with eight non-U.S.  investors, all of which was converted into common
stock of the Company from June 3, 1996,  through July 1, 1996,  for an aggregate
of 3,079,132  shares at a conversion rate of 75% of the fair market value of the
Company's  common  stock at the time of  conversion.  The Company also placed an
additional  $3,300,000 of 5%  Convertible  Debentures  (before  commissions  and
expenses of approximately $430,000) with one non-U.S. investor on June 28, 1996,
which was  converted  into common  stock of the Company  from August 28, 1996 to
November 28, 1996, for an aggregate of 7,654,441  shares at a conversion rate of
80% of the  fair  market  value  of the  Company's  common  stock at the time of
conversion.  All  of the  foregoing  transactions  were  effected  in  off-shore
offerings  with non-U.S.  investors  pursuant to Regulation S of the  Securities
Act. The Company claims exemption for the foregoing issuance of its Common Stock
under the Act by virtue of Sections 901, et seq. of Regulation S as  promulgated

<PAGE>

under the Act, and also by virtue of Section 4(2) of the Act as transactions not
involving a public  offering.  Each of the  persons  acquiring  such  securities
represented in writing that he was acquiring such  securities for investment and
not with a view to  distribution to the public and also confirmed their non U.S.
Person status (as defined in Regulation  S). All of the  securities  were issued
with a restrictive  legend regarding  transfer,  and  stop-transfer  orders were
given to the  Company's  transfer  agent in  connection  with the  securities so
issued.  There was no public advertising,  and each of the purchasers had access
to complete information regarding the business of the Company.

     The Company also issued 4,934,535 shares of its restricted  Common Stock as
compensation to employees and consultants and 8,107,405  shares in settlement of
company  obligations  related to prior acquisition  transactions of the company.
The Company  claims  exemption for the  foregoing  issuances of its Common Stock
under the Act by virtue of Section 4(2) as  transactions  not involving a public
offering.  Each of the persons acquiring such securities  represented in writing
that he was acquiring  such  securities  for  investment  and not with a view to
distribution to the public. All of the securities were issued with a restrictive
legend regarding transfer,  and stop-transfer orders were given to the Company's
transfer  agent in  connection  with the Common  Stock so  issued.  There was no
public  advertising,   and  each  of  the  purchasers  had  access  to  complete
information regarding the business of the Company.

1997

     During 1997,  in one offering to three  accredited  investors,  the Company
issued  an  aggregate  of  4,615,385  shares of its  Common  Stock  pursuant  to
Regulation  D of the Act for an aggregate  offering  price of  $3,000,000,  with
commissions and costs of the offering aggregating approximately $240,000 of that
amount.  In February of 1997, an employee of the Company paid $2,625 to exercise
options  for 5,250  shares  of  Common  Stock.  Each of the  investors  provided
representations  confirming  their status as accredited  investors.  The Company
claims  exemption for the foregoing  issuances of its Common Stock under the Act
by virtue of Section 4(2) as transactions not involving a public offering.  Each
of the persons  acquiring  such  securities  represented  in writing that he was
acquiring such  securities for investment and not with a view to distribution to
the  public.  All of the  securities  were  issued  with  a  restrictive  legend
regarding  transfer,  and  stop-transfer  orders  were  given  to the  Company's
transfer  agent in  connection  with the Common  Stock so  issued.  There was no
public  advertising,   and  each  of  the  purchasers  had  access  to  complete
information regarding the business of the Company.

     In May 1997,  $3,381,000 (net of commissions and expenses of  approximately
$484,000) was raised from the sale of 13% convertible debentures to two non-U.S.
investors. Such debentures were converted at the option of the holders, into the
restricted  common stock of the Company at a conversion  rate of 75% of the fair
market  value  of the  Company's  common  stock  for  the  principal  amount  of
$3,865,000 in July of 1997 into 11,982,343  shares. The Company claims exemption
for the  foregoing  issuance  of its  Common  Stock  under  the Act by virtue of
Sections 901, et seq. of Regulation S as promulgated  under the Act, and also by
virtue  of  Section  4(2) of the Act as  transactions  not  involving  a  public
offering.  Each of the persons acquiring such securities  represented in writing
that he was acquiring  such  securities  for  investment  and not with a view to
distribution  to the public and also confirmed  their non U.S. Person status (as
defined in Regulation S). All of the  securities  were issued with a restrictive
legend regarding transfer,  and stop-transfer orders were given to the Company's
transfer  agent in  connection  with the Common  Stock so  issued.  There was no
public  advertising,   and  each  of  the  purchasers  had  access  to  complete
information regarding the business of the Company.
<PAGE>

     The  Company  also  issued  7,409,362  shares  of  its  Common  Stock  as
compensation  to  employees  and  consultants  during 1997.  The Company  claims
exemption  for the  foregoing  issuances  of its Common  Stock  under the Act by
virtue of Section 4(2) as transactions not involving a public offering.  Each of
the  persons  acquiring  such  securities  represented  in  writing  that he was
acquiring such  securities for investment and not with a view to distribution to
the  public.  All of the  securities  were  issued  with  a  restrictive  legend
regarding  transfer,  and  stop-transfer  orders  were  given  to the  Company's
transfer  agent in  connection  with the Common  Stock so  issued.  There was no
public  advertising,   and  each  of  the  purchasers  had  access  to  complete
information regarding the business of the Company.

1998

     During  1998,  in one  offering to two  accredited  investors,  the Company
issued  an  aggregate  of  4,962,318  shares of its  Common  Stock  pursuant  to
Regulation  D of the Act for an aggregate  offering  price of  $2,140,000,  with
commissions and costs of the offering aggregating approximately $160,000 of that
amount. Each of the investors provided  representations  confirming their status
as  accredited  investors.  The  Company  claims  exemption  for  the  foregoing
issuances  of its  Common  Stock  under  the Act by virtue  of  Section  4(2) as
transactions not involving a public offering. Each of the persons acquiring such
securities  represented  in writing that he was acquiring  such  securities  for
investment  and  not  with a view  to  distribution  to the  public.  All of the
securities  were  issued  with a  restrictive  legend  regarding  transfer,  and
stop-transfer  orders were given to the Company's  transfer  agent in connection
with the Common Stock so issued.  There was no public  advertising,  and each of
the purchasers had access to complete information  regarding the business of the
Company.

     The Company also issued 215,000 shares of its Common Stock as  compensation
to employees and consultants  during 1998. The Company claims  exemption for the
foregoing  issuances of its Common Stock under the Act by virtue of Section 4(2)
as transactions not involving a public offering.  Each of the persons  acquiring
such securities represented in writing that he was acquiring such securities for
investment  and  not  with a view  to  distribution  to the  public.  All of the
securities  were  issued  with a  restrictive  legend  regarding  transfer,  and
stop-transfer  orders were given to the Company's  transfer  agent in connection
with the Common Stock so issued.  There was no public  advertising,  and each of
the purchasers had access to complete information  regarding the business of the
Company.

Item 17.  Exhibits and Financial Statement Schedules.

     2.1  Reorganization  Agreement  dated  April  22,  1989.  (Incorporated  by
          reference  to  Exhibit  2(a) to the  Company's  Form S-1  Registration
          Statement) (1)
     2.2  Merger agreement between Computer  Concepts  Investment Corp. and RAMP
          Associates Inc. dated October 31, 1990.  (Incorporated by reference to
          Exhibit 2(b) to the Company's Form S-1 Registration Statement)(1)
     2.3  Merger agreement between Computer  Concepts Corp. and Softworks,  Inc.
          (Incorporated  by reference to Exhibit 2(a) to the Company's  Form 8-K
          filed on October 29, 1993)
     2.4  Merger  Agreement  dated December 31, 1994,  between the Company,  its
          wholly owned  subsidiary,  CCC/MapLinx  Corp.,  and MapLinx Corp.  and
          Merit Technology,  Inc. (Incorporated by reference to Exhibit 10(a) to
          the  Company's  Annual Report on Form 10-K/A for the fiscal year ended
          December 31, 1994.)

     3.1(i)(a) Certificate  of  Incorporation,  as amended.  (Incorporated  by
               reference to Exhibit 3(a) of Form S-1 Registration Statement.)(1)
           (b) Certificate  of  Amendment  (Change  in  Name)  (Incorporated  by
               reference to Exhibit 3(a) of Form S-1 Registration Statement.)(1)
           (c) Certificate  of  Amendment  (Change  in  Name)  (Incorporated  by
               reference to Exhibit 3(a) of Form S-1 Registration Statement.)(1)
           (d) Certificate  of  Amendment  (Authorizing  Increase  in  Shares of
               Common Stock)  (Incorporated by reference to Exhibit 3.1(i)(d) of
               Form 10-K filed April 15, 1996.)
     3.2(ii)  By-Laws.  (Incorporated  by  reference  to  Exhibit  3(d)  to  the
          Company's Form S-1 Registration Statement.)(1)
     4.1  Form of  Common  Stock  Certificate.  (Incorporated  by  reference  to
          Exhibit 4 to the Company's Form S-1 Registration Statement.)(1)
     4.2  Computer  Concepts  Directors,  Officers  and  Consultants  1993 Stock
          Option Plan (Incorporated by reference to Exhibit 4.1 to the Company's
          Registration Statement on Form S-8 filed on June 28, 1995)
     4.3  Computer  Concepts  Employees  1993  Stock  Option  Plan  (Incorp.  by
          reference to Exhibit 4.2 to the  Company's  Registration  Statement on
          Form S-8 filed on June 28, 1995)

<PAGE>

     4.4  Computer Concepts 1995 Incentive Stock Plan (Incorporated by reference
          to Exhibit 5 to the  Company's  Proxy  Statement  filed on January 29,
          1996.)
     10.1 Lease  Extension  Agreement  between Atrium  Executive  Center and the
          Company  (Incorporated  by  reference  to  Exhibit  10(g)(ii)  to  the
          Company's  Annual  Report  on Form  10-K  for the  fiscal  year  ended
          December 31, 1993.)
     10.2 Agreement between Software Publishing Corp. And the Company dated June
          14, 1994. (Incorp. by reference to Exhibit 10(a) to the Company's Form
          8-K filed on July 1, 1994.)
     10.3 Agreement between Computer Concepts Europe, Ltd. and the Company dated
          August 15, 1993.  (Incorporated  by reference to Exhibit  10(v) to the
          Company's  Annual  Report on Form  10-K/A  for the  fiscal  year ended
          December 31, 1993.)
     10.4 Agreement between Computer Concepts Europe, Ltd. and the Company dated
          September 27, 1993. (Incorporated by reference to Exhibit 10(w) to the
          Company's  Annual  Report on Form  10-K/A  for the  fiscal  year ended
          December 31, 1993.)
     22   Subsidiaries of the Company.  (Incorporated by reference to Exhibit 22
          to the Company's  Annual Report on Form 10-K for the fiscal year ended
          December 31, 1996.)
--------
     (1) Filed with Form S-1, Registration  Statement of Computer Concepts Corp.
     Reg. No. 33-47322 and are incorporated herein by reference.

The following Exhibits are filed herewith:

     5.   Opinion regarding Legality (Opinion by Daniel B. Kinsey, P.C.)
     24.1 Consent of Daniel B. Kinsey, Esq. (Included in Item 5)
     24.2 Consent of Hays & Company
     25.1 Powers of Attorney (appear on page II-4).
--------
(1)  All  references  to  Registration  on Form S-1  refer to  Registration  No.
     33-47322.

Item 18. Undertakings.

     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to  directors,  officers,  and  controlling
persons of the issuer  pursuant to the  Certificate  of  Incorporation,  Bylaws,
indemnity  agreements,  the foregoing provisions,  or otherwise,  the issuer has
been advised that in the opinion of the Securities and Exchange  Commission such
indemnification  is  against  public  policy  as  expressed  in the  Act and is,
therefore,  unenforceable. In the event that a claim for indemnification against
such liabilities  (other than the payment by the issuer of expenses  incurred or
paid  by a  director,  officer  or  controlling  person  of  the  issuer  in the
successful  defense of any  action,  suit or  proceeding)  is  asserted  by such
director,  officer or controlling person in connection with the securities being
registered, the issuer will, unless in the opinion of its counsel the matter has
been  settled  by  controlling  precedent,  submit  to a  court  of  appropriate
jurisdiction the question whether such  indemnification  by it is against public
policy as  expressed  in the  Securities  Act and will be  governed by the final
adjudication of such issue.
<PAGE>

     Registrant hereby undertakes that it will:

     (1)  File,  during  any  period in which it offers or sells  securities,  a
          post-effective amendment to this registration statement to:

          (i)  Include  any  prospectus  required  by  Section  10(a)(3)  of the
               Securities Act;

          (ii) Reflect in the prospectus any facts or events which, individually
               or together, represent a fundamental change in the information in
               the registration statement; and

          (iii)Include any  additional or changed  material  information  on the
               plan of distribution.

   (2)    For  determining  any liability  under the Securities  Act, treat each
          post-effective  amendment  that contains a form of prospectus as a new
          registration  statement for the securities offered in the registration
          statement,  and that  offering of the  securities  at that time as the
          initial bona fide offering of those securities.

   (3)    File a post-effective amendment to remove from registration any of the
          securities that remain unsold at the end of the offering.

   (4)    For  determining  any liability  under the  Securities  Act, treat the
          information  omitted from the form of prospectus filed as part of this
          registration  statement in reliance  upon Rule 430A and contained in a
          form of prospectus filed by the issuer under Rule 424(b)(1), or (4) or
          497(h) under the Securities Act as part of this registration statement
          as of the time the Commission declared it effective.

   (5)    Provide  to  the   underwriter   at  the  closing   specified  in  the
          underwriting   agreement   certificates  in  such   denominations  and
          registered  in such names as  required  by the  underwriter  to permit
          prompt delivery to each purchaser.

<PAGE>


                                   SIGNATURES

   In  accordance  with the  requirements  of the  Securities  Act of 1933,  the
registrant certifies that it has reasonable grounds to believe that it meets all
of the  requirements  of filing  on Form S-1 and  authorized  this  registration
statement to be signed on its behalf by the undersigned, in Bohemia, New York on
the 20th day of January, 1998.

                               COMPUTER CONCEPTS CORP.


                               By: /s/ Daniel Del Giorno
                                   -----------------------------------
                                      Daniel Del Giorno, Sr., Chairman

                                POWER OF ATTORNEY

Pursuant to the  requirements of the Securities Act of 1933,  this  Registration
Statement has been signed below on January 20, 1998, by the following persons in
the  capacities  indicated.  Each  person  whose  signature  appears  below also
constitutes   and   appoints   Daniel   DelGiorno,   Jr.  his  true  and  lawful
attorney-in-fact  and agent, with full power of substitution and resubstitution,
for him and in his name,  place and stead, in any and all capacities to sign any
and all amendments  (including  post-effective  amendments) to this Registration
Statement,  and to file  the  same,  with all  exhibits  thereto  and all  other
documents in  connection  therewith,  with the  Commission,  granting  unto said
attorney-in-fact  and agent full power and  authority to do and perform each and
every act and thing  requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person,  hereby ratifying and confirming
all that said  attorney-in-fact  and agent or his substitute or substitutes  may
lawfully do or cause to be done by virtue hereof.


          Signatures                           Title
          ----------                           -----

/s/ Daniel Del Giorno
---------------------------                  Chairman, Director, Ass't Sec.
Daniel Del Giorno, Sr.

/s/ Daniel Del Giorno
---------------------------                  President, Principal Operating
Daniel Del Giorno, Jr.                       Officer, Director

/s/ Jack Stuart Beige
---------------------------                  Director
Jack Stuart Beige

/s/ George Aronson
---------------------------                  Chief Financial Officer
George Aronson



<PAGE>



                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


================================================================================

                             COMPUTER CONCEPTS CORP.

================================================================================

                         Form S-1 Registration Statement

                                       ``

________________________________________________________________________________

                             E X H I B I T  I N D E X
________________________________________________________________________________
<TABLE>
<CAPTION>

                                                         Page No. in Sequential
Exhibit                                                  Numbering of all Pages,
Number       Exhibit Description                         including Exhibit Pages
-------      -------------------                         -----------------------

<S>      <C>                                                <C>
5        Opinion and Consent of Counsel . . . . . . . .

23.1     Consent of Counsel . . . . . . . . . . . . . .     See Exhibit 5

23.2     Consent of Hays & Company  . . . . . . . . . .

24       Powers of Attorney . . . . . . . . . . . . . .     See signature page
</TABLE>
[{"type": "S-1", "sequence": "1", "secsgml_size_bytes": 363349}]
{"company-data": {"conformed-name": "COMPUTER CONCEPTS CORP /DE", "cik": "0000879703", "assigned-sic": "7373", "irs-number": "112895590", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-44683", "film-number": "98510730"}, "business-address": {"street1": "80 ORVILLE DR", "city": "BOHEMIA", "state": "NY", "zip": "11716", "phone": "516-244-1500"}, "mail-address": {"street1": "80 ORVILLE DRIVE", "city": "BOHEMIA", "state": "NY", "zip": "11716"}}
As filed with the Securities and Exchange Commission on January 22, 1998
                                                    Registration No. 
--------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    Form S-1

                             Registration Statement
                                      Under
                           The Securities Act of 1933

                             COMPUTER CONCEPTS CORP.
             (Exact Name of Registrant as Specified in its Charter)

       Delaware                    [8980]                     11-2895590
-----------------------    ---------------------------     ---------------------
 (State or Jurisdiction   (Primary Standard Industrial        (IRS Employer
of Incorporation or        Classification Code Number)     Identification Number
   Organization)
                                               Daniel DelGiorno, Jr., President
                                               Computer Concepts Corp.
       80 Orville Drive                        80 Orville Drive
       Bohemia, New York 11716                 Bohemia, New York 11716
          (516) 244-1500                           (516) 244-1500
---------------------------------    -------------------------------------------
(Address and telephone number, of   (Name, address and telephone number of agent
principal executive offices and                    for service)
  principal place of business)                    

  Approximate date of commencement of proposed sale to the public: As soon as
        practicable after the Registration Statement becomes effective.

  If any of the securities being registered on this Form are to be offered on a
  delayed or continuous basis pursuant to Rule 415 under the Securities Act of
                       1933, check the following box [X].

     If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
    and list the Securities Act registration statement number of the earlier
          effective registration statement for the same offering [ ].

                         CALCULATION OF REGISTRATION FEE
=============================================================================================================
                                                 Proposed  Maximum     Proposed Maximum
  Title of Each Class of         Amount to be    Offering Price Per    Aggregate Offering       Amount of
Securities to be Registered      Registered(1)      Security(2)             Price (2)        Registration Fee
-------------------------------------------------------------------------------------------------------------
Common Stock, $.0001 Par Value      11,747,318         $.46875             $5,506,555           $1,625
=============================================================================================================
(1) Includes 420,000 shares issuable upon exercise of options or warrants.
(2) Estimated  solely for purposes of calculating the  registration fee pursuant
    to rule 457 under the Securities Act of 1933,  based on the average high and
    low reported sale prices on the National  Association of Securities Dealers,
    Inc. Automated Quotations System on January 16, 1998.
The  Registrant  hereby amends this  Registration  Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further  amendment  which  specifically  states  that  this  Registration
Statement shall  thereafter  become effective in accordance with Section 8(a) of
the  Securities  Act of 1933 or until the  Registration  Statement  shall become
effective on such date as the Commission,  acting pursuant to said Section 8(a),
may determine.
================================================================================
COMPUTER CONCEPTS CORP.

                              CROSS REFERENCE SHEET
Registration Statement
        Item Number and Heading                     Location in Prospectus
        -------------------------                   ----------------------
1.   Forepart of Registration Statement 
     and Outside Front . . . . . . . . . . . . .  Cover Page
     Cover Page of Prospectus
2.   Inside Front and Outside Back Cover 
     Pages of Prospectus . . . . . . . . . . . .  Summary, Risk Factors
3.   Summary Information and Risk Factors  . . . 
4.   Use of Proceeds . . . . . . . . . . . . . .  Use of Proceeds
5.   Determination of Offering Price . . . . . .  Cover Page; Risk Factors;
                                                  Selling Security holders
6.   Selling Security holders. . . . . . . . . .  Selling Security holders
7.   Dilution. . . . . . . . . . . . . . . . . .  Not Applicable
8.   Plan of Distribution. . . . . . . . . . . .  Plan of Distribution; Risk Factors;
                                                  Management; Selling Security holders
9.   Description of Securities . . . . . . . . .  Description of Securities
10.  Interests of Named Experts and Counsel  . .  Legal Matters; Experts
11(a).Description of Business. . . . . . . . . .  The Company; Business
11(b).Description of Property. . . . . . . . . .  Business - Property
11(c).Legal Proceedings. . . . . . . . . . . . .  Business - Legal Matters
11(d).Market for Common Equity and Related 
      Stockholder Matters  . . . . . . . . . . .  Cover Page; Security Ownership of Certain
                                                  Beneficial Owners and Management;
                                                  Description of Securities
11(e).Financial Statements . . . . . . . . . . .  Financial Statements
11(f).Selected Financial Data  . . . . . . . . .  Selected Financial Data
11(g).Supplementary Financial Information  . . .  Financial Statements
11(h).Management's Discussion and Analysis or 
      Plan of Operation  . . . . . . . . . . . .  Management's Discussion and Analysis of
                                                  Financial Condition and Results of Operations
11(i).Changes in and Disagreements with 
      Accountants on Accounting and Financial 
      Disclosure . . . . . . . . . . . . . . . .  Changes in Accountants
11(j).Directors, Executive Officers, Promoters 
      and Control Persons  . . . . . . . . . . .  Management
11(k).Executive Compensation . . . . . . . . . .  Management
11(l).Security Ownership of Certain Beneficial
      Owners and . . . . . . . . . . . . . . . .  Security Ownership of Certain Beneficial
      Management                                  Owners and Management
11(m).Certain Relationships and Related 
      Transactions   . . . . . . . . . . . . . .  Certain Transactions
12.  Disclosure of Commission Position on 
     Indemnification for Securities Act 
     Liabilities . . . . . . . . . . . . . . . .  Management, Part II
13.  Other Expenses of Issuance and Distribution  Part II
14.  Indemnification of Directors and Officers .  Management; Part II
15.  Recent Sales of Unregistered Securities . .  Part II
16.  Exhibits and Financial Statement Schedules.  Part II
17.  Undertakings. . . . . . . . . . . . . . . .  Part II
Information   contained  herein  is  subject  to  completion  or  amendment.   A
registration  statement  relating  to these  securities  has been filed with the
Securities  and Exchange  Commission.  These  securities may not be sold nor may
offers to buy be accepted prior to the time the registration  statement  becomes
effective.  This  prospectus  shall  not  constitute  an  offer  to  sell or the
solicitation of an offer to buy nor shall there be any sale of these  securities
in any State in which such offer,  solicitation  or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED JANUARY 22, 1998

PRELIMINARY PROSPECTUS

                             COMPUTER CONCEPTS CORP.

                        11,747,318 Shares of Common Stock

     This  Prospectus  relates to 11,747,318  shares of Common Stock,  par value
$.0001 per share,  of  Computer  Concepts  Corp.,  a Delaware  corporation  (the
"Company"). See "Description of Securities" and "Selling Security holders."

   The Common Stock offered by this  Prospectus may be sold from time to time by
the  Selling  Security  holders,  or  by  their  transferees.   No  underwriting
arrangements  have  been  entered  into by the  Selling  Security  holders.  The
distribution of the securities by the Selling  Security  holders may be effected
in one or more transactions that may take place on the over-the-counter  market,
including ordinary broker's transactions,  privately-negotiated  transactions or
through  sales to one or more dealers for resale of such shares as principals at
market  prices  prevailing  at the  time of  sale,  at  prices  related  to such
prevailing  market  prices  or at  negotiated  prices.  Usual and  customary  or
specifically negotiated brokerage fees or commissions may be paid by the Selling
Security holders in connection with sales of such securities.

   The Selling Security holders and intermediaries  through whom such securities
may be sold may be deemed  "underwriters"  within the meaning of the  Securities
Act of 1933,  as  amended  ("Securities  Act") with  respect  to the  securities
offered  and  any  profits  realized  or  commissions  received  may  be  deemed
underwriting  compensation.  The  Company  has agreed to  indemnify  the Selling
Security holders against certain  liabilities,  including  liabilities under the
Securities Act.

   The Company will bear the expenses of this offering, including filing fees.

     The  Company's  Common Stock is traded on NASDAQ  (NASDAQ  SmallCap  Market
symbol:  CCEE).  On  January  16,  1998 , the last  reported  sale  price of the
Company's Common Stock as reported by NASDAQ was $.46875 per share.

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

                 AN INVESTMENT IN THE SECURITIES OFFERED HEREBY
                       INVOLVES A HIGH DEGREE OF RISK AND
         SHOULD BE CONSIDERED ONLY BY INVESTORS WHO CAN AFFORD THE LOSS
                           OF THEIR ENTIRE INVESTMENT.
                               SEE "RISK FACTORS.
                        --------------------------------

          THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
           SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
      COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION
            PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
            ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
                        --------------------------------

                 The date of this Prospectus is _________, 1998
REPORTS TO SECURITY HOLDERS

       The Company intends to furnish its shareholders with annual reports
containing  audited  financial  statements,  examined by an  independent  public
accounting  firm, and such interim  reports as it may determine to furnish or as
may be required by law.  The  Company's  fiscal year ends on December 31 of each
year.

                              AVAILABLE INFORMATION

   The  Company  has filed with the  Securities  and  Exchange  Commission  (the
"Commission"),  Washington,  D.C., a Registration Statement on Form S-1 pursuant
to the  Securities  Act of 1933,  as amended  (the  "Act"),  with respect to the
Common  Stock  offered  hereby.   This  Prospectus  does  not  contain  all  the
information set forth in the  Registration  Statement and the exhibits  relating
thereto.  For further  information with respect to the Company and the shares of
Common Stock offered by this Prospectus,  reference is made to such Registration
Statement and the exhibits thereto.  Statements  contained in this Prospectus as
to the contents of any contract or other document are not  necessarily  complete
and in each  instance  reference  is made to the copy of such  contract or other
document filed as an exhibit to the Registration  Statement for a full statement
of the provisions thereof;  each such statement contained herein is qualified in
its entirety by such reference.

   The Company's  Common Stock is registered  with the  Securities  and Exchange
Commission,  Washington,  D.C. 20549,  under the provisions of Section 12 (g) of
the  Securities  Exchange Act of 1934,  as amended  (the  "Exchange  Act").  The
Company is subject to the informational requirements of the Exchange Act, and in
accordance therewith files reports,  proxy statements and other information with
the  Commission.  Such reports,  proxy  statements and other  information can be
inspected and copied at the public reference facilities maintained at the office
of the Commission at Room 1024, 450 Fifth Street, N.W.,  Washington,  D.C. 20549
and at the Commission's Regional Offices at Suite 788, 1375 Peachtree St., N.E.,
Atlanta,  Georgia 30367,  Northwestern  Atrium Center,  500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511 and 7 World Trade Center, New York, New
York 10048.  Copies of such material can be obtained  from the Public  Reference
Section of the  Commission,  Washington,  D.C.  20549,  at prescribed  rates. In
addition,  the Company's  Common Stock is listed on the National  Association of
Securities  Dealers,  Inc.  Automated  Quotations  System,  and  copies  of  the
foregoing  materials  and  other  information  concerning  the  Company  can  be
inspected at the offices of the National Association of Securities Dealers, Inc.
at 1735 K Street, N.W., Washington, D.C. 20006.
PROSPECTUS SUMMARY

   The  following  summary is  qualified  in its  entirety by the more  detailed
information and financial statements appearing elsewhere in this Prospectus.

                                   THE COMPANY

     Computer Concepts Corp.  (hereinafter referred to as "Computer Concepts" or
the "Company") was organized  under the name Unique  Ventures,  Inc.,  under the
laws of the  State of  Delaware  on  August  27,  1987.  Unique  Ventures,  Inc.
thereafter became a "blind-pool" public company and changed its name to Computer
Concepts Corp. in 1989.

   The Company  designs,  develops,  markets and supports  information  delivery
computer software  products,  including  end-user data access tools for personal
computers and systems management  software products for corporate mainframe data
centers.  This  business has been built through a  combination  of  development,
acquisitions and a strategic partnership.

   During the years 1989  through  1992,  the Company was  primarily  engaged in
research and development activities regarding its primary product,  "d.b.Express
 ." During 1993,  the Company began to expand its product,  sales,  marketing and
administrative  activities,  and  began  the  transition  from  a  research  and
development-oriented company into a market-driven software products business. In
1994,  the  Company  continued  the process of  evaluating  its  businesses  and
determining  where its strategic  focus and financial and  management  resources
should be directed.  As a result,  for the fourth  quarter of 1994,  the Company
adjusted the value of certain assets to reflect their net  realizable  value and
management's  current  operating  plan.  In 1995,  1996 and  1997,  the  Company
determined to further focus its activities to its Softworks, Inc. subsidiary and
exploitation  of the parent  Company's  d.b.Express  software  technology and in
1996, sold its "Superbase"  technology assets and in 1997 sold the net assets of
its MapLinx Inc.  subsidiary.  As a result, for the third and fourth quarters of
1995 and for the  fourth  quarter of 1996,  the  Company  adjusted  the value of
certain assets to reflect their net realizable value.

   In October 1990, Computer Concepts acquired RAMP Associates, Inc. ("RAMP"), a
privately  owned Delaware  corporation  engaged in general  computer  consulting
services.  RAMP was  previously  owned by Russell  Pellicano,  the  inventor  of
d.b.Express,  and  currently a director and officer of the  Company.  During the
fourth  quarter of 1993, in connection  with its long-term  strategic  plan, the
Company eliminated its general computer consulting service line, taking a charge
for the write-off of the  unamortized  goodwill  associated with RAMP as well as
the accrual of certain severance costs.

   Effective September 1993, the Company acquired Softworks, Inc. ("Softworks"),
a private Maryland company founded in 1977, and an acknowledged leader providing
systems management software for mainframe computer systems.  Softworks currently
markets  twenty-four  software  products,  and holds over 2,400 licenses in over
1,800  customer   installations   worldwide.   The  products  are  installed  in
approximately 80 of the Fortune 100 companies' data centers. See Note 3 of Notes
to Consolidated Financial Statements for the year ended December 31, 1996 .

   During  June 1994,  the  Company  completed  the  purchase  of the  Superbase
technology  and certain  related  assets from Software  Publishing  Corporation.
Superbase is a database programming language. The Company sold this asset in the
second quarter of 1996. See Note 3 of Notes to Consolidated Financial Statements
for the year ended December 31, 1996.

   During  December 1994, the Company  acquired  MapLinx,  Inc.  ("MapLinx"),  a
provider of PC based  software  that  allows for  geographical  presentation  of
database  information.  See  Notes 3 and 12 of Notes to  Consolidated  Financial
Statements  for the year  ended  December  31,  1996.  In  conjunction  with the
Company's  decision to focus its activities on  exploitation  of the d.b.Express
technology  and its  Softworks  subsidiary,  the Company  sold the net assets of
MapLinx in 1997.

   During December 1994, through its Softworks' subsidiary, the Company acquired
DBopen,  Inc.  ("DBopen"),  a  provider  of  PC  database  administration  tools
employing  client/server  technology.  During the third quarter of 1995, certain
new products  pertaining  to this  acquisition  were  introduced  in the market.
During the fourth  quarter of 1995,  as a result of limited  sales and  changing
market conditions,  it was determined that significant  additional  expenditures
would have to be incurred to modify the  product to meet these  changing  market
conditions. In the opinion of management,  such additional expenditures exceeded
the potential benefits, and accordingly,  a decision was made to discontinue the
products.  Consistent  with this  decision,  the Company  wrote off the carrying
value of its  investment in the DBopen  acquisition  of $1,317,000 in the fourth
quarter of 1995.

   The Company's  long-term  strategic  plan is focused on becoming a preeminent
provider of  innovative  software  products  which break down  barriers  between
people  and  data  (thereby  allowing  corporate  users  to more  easily  access
enterprise-wide data) through sales of existing products and new technologies as
well as continuing to support the Softworks'  mainframe  sector. To achieve this
plan, the Company plans growth of d.b.Express  primarily through the development
of several vertical markets.  Telecommunications  is presently being targeted as
one of the first vertical  markets.  Additionally the Company will also focus on
software tools for the data warehousing markets.  These markets are being driven
by wide-scale  corporate  right-sizing  and the  empowerment of people to access
enterprise-wide  data, both of which create greater  efficiencies  and corporate
profits.  Additionally, a new, potentially significant,  component in Softworks'
strategic plan is Softworks' Year 2000 technology which positions the Company to
capitalize  on  providing  solutions  for  certain  elements  of  the  impending
world-wide  year 2000  problem.  In addition to the  d.b.Express  and  Softworks
product lines, the Company has a newly formed business unit which is designed to
provide a wide  array of  information  technology,  support  and  services.  The
Company has employed an individual formerly with I.B.M. having expertise in this
field and intends to capitalize  on his  experience  and  competency in order to
create a unique,  single  management  infrastructure  to  support  an  extensive
selection of services  and  vendors.  The  Company's  new  business  line offers
solutions,  support,  and  strategies to solve various  business  crises in such
areas as: network determinations,  help desk applications,  wiring/cabling,  LAN
connections,  moves/adds/changes,  and project management, as well as overseeing
new installations and offering on-site component repair.

     During the first quarter of 1995,  the Company  reorganized  its management
team. A new business plan was developed and implemented, with the major focus of
the new business plan being the development of strategic alliances, and securing
d.b.Express  license  agreements  with major software  companies which has since
been  further  refined to focus on  selected  vertical  markets  with an initial
emphasis on the  telecommunications  market.  The first  evidence  of  potential
future  success of this plan was  announced on June 1, 1995 when the Company and
Oracle Corporation  entered into a development  agreement.  The Company also has
entered into  development  or license  agreements  with IBM, Dell  Computers and
Information  Builders,  Inc.,  however,  the  Company  was advised in the second
quarter  of 1996 that Dell  Computers  was  discontinuing  the  distribution  of
d.b.Express.  Additionally,  the Company  entered  into a  world-wide  marketing
agreement  with Perot Systems  Corporation  in December,  1995, and on April 12,
1996, the Company confirmed the signing of a contract with the State of New York
permitting all State agencies and divisions to acquire  d.b.Express  however the
contract  does not  guarantee  any  minimum  number of  orders.  The  Company is
currently in negotiations  with several other national  corporations and leading
software  companies for the licensing of d.b.Express.  None of these  agreements
provide for any sales commitments,  and to date, sales from such agreements have
been  insignificant.  Recently,  pursuant to the  Company's  shift to pursuing a
vertical market, the telecommunications  industry, the Company announced that it
has signed an agreement  with a major  telecommunications  company from which it
anticipates the receipt of significant d.b.Express revenues in 1998; the Company
will  receive an initial  payment in excess of  $700,000  and share in  revenues
generated  by  the  technology   thereafter.   Management  believes  that  other
negotiations may
result in the  consummation of additional  strategic  alliances  and/or software
license   agreements  within  the  foreseeable  future  although  there  are  no
assurances such agreements will occur.

   Pursuant to the  authorization  granted at the  Company's  Annual  Meeting of
Shareholders held March 20, 1996, the Company's  authorized capital was increase
to 150,000,000 shares of Common Stock on March 22, 1996.

   At the  Company's  Annual  Meeting of  Shareholders  held  November 26, 1997,
authorization  for an amendment to the Company's  Articles of  Incorporation  to
increase  its  authorized  capital  from  150,000,000  shares of Common Stock to
300,000,000  shares of Common Stock was approved,  and authorization to effect a
reverse  stock  split at a ratio  of 1 for 2 up to 1 for 10,  was  approved.  No
action has been taken in regard to any of these authorizations,  and the Company
does not currently have plans to take action.  Therefore,  there is no assurance
that either, both or neither of the authorized actions will be effected.

     During 1996,  the Company  strengthened  its corporate  management  team by
retaining consultants to oversee, direct and supervise the operations as well as
sales and  marketing.  Further,  during the  second  half of 1996,  the  Company
retained  additional key employees at both corporate and Softworks.  The Company
believes  that the  increase in and  strengthening  of upper  level  management,
throughout  the  corporation  will aid and improve its  performance  in the near
future.  With respect to the d.b.Express  technology,  the Company is continuing
its efforts to develop strategic  alliances,  and securing  d.b.Express  license
agreements with major software  companies,  as well as pursue specific  vertical
markets, such as telecommunications.  In this regard, the Company announced that
its d.b.Express  technology has been integrated into British Telecom's Syncordia
Services' C-View  application which allows customers to remotely access over the
Internet a wide variety of account information maintained in Syncordia's central
data repository.  The d.b.Express  technology enables the customer to access the
data  without the need to download  the data first and is believed to provide at
least one  solution  to that aspect of the  Internet  "bandwidth"  problem.  The
Company  recently  announced  that  it had  signed  an  agreement  with a  major
telecommunications  company and anticipates  receipt of significant  d.b.Express
revenues therefrom in 1998, however, due to contractual restrictions the Company
is  presently  limited  from  further  disclosures  regarding  the  terms of the
agreement.

   See "Risk Factors",  "Management" and "Certain Transactions" for a discussion
of certain  factors that should be considered in evaluating  the Company and its
business.
THE OFFERING
Securities Offered by the Selling Security holders. .        11,747,318 Shares of Common Stock

NASDAQ SmallCap Market Symbol
   for Common Stock . . . . . . . . . . . . . . . . .        CCEE

Risk Factors. . . . . . . . . . . . . . . . . . . . .        Purchase of Common Stock being offered
                                                             hereby involves a significant degree of risk,
                                                             including the potential loss of all funds
                                                             invested, and including risks associated
                                                             with the need for additional funds, a
                                                             limited operating history, intense
                                                             competition, rapid growth, and dependence
                                                             on key personnel, among others.  See
                                                             "Risk Factors."

Number of shares outstanding if all securities
offered are sold (including  420,000 shares
included herein issuable upon exercise of
options or warrants, and 12,744,229 shares issuable
upon exercise of options or warrants previously
issued) . . . . . . . . . . . . . . . . . . . . .            146,793,505
SUMMARY FINANCIAL INFORMATION

         The following summary financial information  concerning the Company has
been derived from the Consolidated Financial Statements, related notes and other
financial  information  included elsewhere in this Prospectus and should be read
in conjunction with such financial  statements and the notes thereto.  All share
and per share data has been adjusted to reflect the  one-for-four  reverse stock
split  approved  by the Company's  shareholders  on  September  22,  1992.  This
information  should  be read in  conjunction  with  the  Consolidated  Financial
Statements:

         Summary Consolidated Statement of Operations Data
Nine Months Ended
                                     September 30          Years Ended December 31,
                                  -----------------        ------------------------
                                         (in thousands, except per share data)

                                   1997     1996      1996      1995      1994      1993     1992
                                   ----     ----      ----      ----      ----      ----     ----
Revenues                         $19,931   $12,144   $19,030   $16,302   $13,695   $3,360 $     97
                                 -------   -------   -------   -------   -------   ------  -------  
Total costs and expenses          32,455    21,418    35,173    34,667    25,474   16,699    5,074
                                 -------   -------   -------    ------   -------   ------  -------  

Operating loss                  $(12,524)  $(9,274)  (16,143)  (18,365)  (11,779) (13,339)  (4,977)
Other income (expense)              (475)   (2,810)   (2,810)     -         (428)    (111)       1
                                 -------   -------   -------   -------   -------  -------  -------    

Net loss                        $(12,999) $(12,084) $(18,953) $(18,365) $(12,207)$(13,450) $(4,976)
                                 =======   =======   =======   =======  ========  =======  =======

Net loss per share                 $(.12)    $(.18)   $(0.27)   $(0.37)   $(0.51)  $(0.86)  $(0.40)
                                 =======   =======   =======   =======   =======  =======  =======  

Weighted average common 
shares outstanding               106,897    66,052    71,301    49,211    24,110   15,721   12,332
                                 =======   =======   =======   =======   =======  =======  =======
Summary Consolidated Balance Sheet Data
At September 30,             At December 31,
                               ----------------             ---------------
                                               (In thousands)

                                  1997      1996      1996      1995       1994     1993    1992   
                                  ----      ----      ----      ----       ----     ----    ----
Working capital (deficit)         $1,334   $3,694    $2,809   $(2,998)   $(3,590) $2,545   $(610)
Total assets                      33,737   25,265    27,671    16,081     21,609  20,607   4,044
Long term debt                       280    2,695       526       800        695     172     163
Long term debt - current portion     453      381       458       359        119      53      26
Common stock subject to redemption     -        -               4,000      4,000       -       -
Shareholders' equity               8,497    6,385     9,524     2,009      7,839  12,168   2,010
RISK FACTORS

     The securities  offered hereby are speculative and involve a high degree of
risk.  Only those persons able to lose their entire  investment  should purchase
these securities. Prospective investors, prior to making an investment decision,
should  carefully read this  prospectus  and consider,  along with other matters
referred to herein, the following risk factors:

     1. Need for  Additional  Funds.  Based on current  levels of operations and
commitments, the Company anticipates that it will need to generate positive cash
flows from  operations  in order to decrease its  dependency  on cash flows from
financing  activities.  Adequate  funds for the  Company's  businesses  on terms
favorable to the Company,  whether through  additional  equity  financing,  debt
financing or other  sources,  may not be available when needed and may result in
significant dilution to existing stockholders.  Further, the Company has no bank
or other credit facility or other readily available access to debt financing. If
the Company is unable to secure additional funding when required,  it would most
likely  decrease or eliminate  certain  current or expansion  activities or sell
certain of its operations.  Ultimately, its inability to obtain sufficient funds
from operations or external  sources would have a material adverse effect on its
financial condition and viability.

     2. Lack of  Profitable  Operations  and Cash Flow from  Operations;  Future
Profitability Uncertain. The Company first acquired operating assets in April of
1989.  It has  incurred  net  losses  of  approximately  $12,207,000  for  1994,
$18,365,000  for 1995, and $18,953,000 for the year ended December 31, 1996, and
$12,999,000 for the nine months ended September 30, 1997, and cumulative  losses
of $82,355,000  through  September 30, 1997, and may incur additional  losses in
the course of building its business.  The profitability of the Company under its
current   business  plan  is   substantially   dependent   upon  the  successful
exploitation of its d.b.Express technology.  There can be no assurances that the
Company will be able to successfully exploit the d.b.Express technology, and the
Company  received a "going concern" opinion in its 1996  Consolidated  Financial
Statements.

     3.  Limited  Operating  History.   The  Company  acquired  or  started  its
businesses in 1989.  Effective  October 1990, it acquired Ramp Associates,  Inc.
and  effective  September  1993,  it  acquired  Softworks,  Inc.,  both of which
operated as private self-sufficient  companies prior to their acquisition by the
Company.  The Company  eliminated the Ramp  Associates,  Inc. line of consulting
services effective December 1993. The Company purchased the "Superbase" database
software technology in June 1994 and acquired DBopen Inc., and MapLinx,  Inc. in
December 1994.  Subsequent to these acquisitions,  as a result of limited sales,
changing market conditions and management's  decision to focus its activities on
exploitation of d.b.Express and Softworks, management has determined to sell the
"Superbase" technology assets (sold in the second quarter of 1996),  discontinue
the DBopen related products and sold the net assets of MapLinx in 1997. Although
the  Company  has  taken  the  steps  it  believes  are   necessary  to  exploit
d.b.Express,  there  can be no  assurance  that the  Company's  efforts  will be
successful in this regard. To date, revenues generated from d.b.Express products
have been insignificant.

     The Company's  products have generated revenues of $19,931,000 for the nine
months ended  September 30, 1997, and  $19,030,000,  $16,302,000 and $13,695,000
for the years ended December 31, 1996, 1995 and 1994, respectively.

     4. Potential  Adverse Impact on Market Price of Shares  Eligible for Future
Sale.  The  Company  has  approximately   133,629,276  shares  of  Common  Stock
outstanding  as of January 16,  1998,  of which  approximately  109,000,000  are
currently without restriction on resale, an additional 9,589,869, 11,754,530 and
11,855,155  shares and shares  issuable  upon  exercise of options were recently
registered on Forms S-1/A,  S-1 and S-8,  respectively in addition to the shares
being  registered  herein.  The influx of all of this Common Stock on the market
together with the 11,747,318 shares registered hereunder (11,327,318 outstanding
shares and 420,000 shares issuable upon exercise of options or warrants included
herein) , could have a significant  adverse effect on the market for, as well as
the price of,  the  Common  Stock.  If all  outstanding  options  and  warrants,
including options subject to various performance  requirements,  were exercised,
the  outstanding  shares would total  146,793,505  shares.  Included  within the
shares recently  registered and those being registered  herein are approximately
8,300,000  contingent  shares which may become issuable as a result of guarantee
obligations.  These  contingent  issuances  could  also  result  in the  need to
increase the number of shares  available  for issuance  through a reverse  stock
split or an increase  in the  authorized  capital,  both of which  actions  were
approved by the shareholders at the November 26, 1997,  shareholders' meeting. A
decline in the market price also may make the terms of future  financings  which
involve  the  Company's  Common  Stock  or the  use  of  convertible  debt  more
burdensome.  Although the  exercise of the options  being  registered  hereunder
would result in significant proceeds to the Company  (approximately  $10,400,000
if all outstanding  warrants and options are earned and are exercised for cash),
the impact of any  significant  number of such shares  entering the market would
likely  have a negative  impact on the  market  price for the  Company's  Common
Stock.  The Company  increased its  authorized  number of shares of common stock
from  60,000,000 to  150,000,000 on March 22, 1996, and received on November 26,
1997,authorization  from the shareholders to increase the authorized  capital to
300,000,000  shares of Common Stock and/or to effect a reverse  stock split in a
ratio of from 1 for 2 to 1 for 10 in the  Board of  Directors'  discretion.  The
Company does not currently plan to act on either authorization,  however,  there
is no  assurance  that  either,  both or neither of the  authorizations  will be
effected.

     5. Competition. The Company's products are marketed in a highly competitive
environment  characterized by rapid change,  frequent product  introductions and
declining prices.  Further,  the Company's  personal computer products have been
designed  specifically  for use on the Intel x86 family of computers,  utilizing
other  well  known  database  products.  A  decline  in the use of this  type of
personal  computer or the emergence of competitive  platforms  could  materially
adversely affect the market for the Company's  products.  The Company  considers
certain  end-user data access tool and  executive  information  system  software
companies  to be  competitors  of its  d.b.Express  product,  including  Trinzic
Corporation,  Cognos,  Inc., Comshare Corp., and Pilot Software,  Inc. While the
Company  believes  that  d.b.Express  can  compete   effectively   against  such
companies'  product  offerings based on ease of use, lack of  programming,  data
access,  speed and price,  no assurance can be given in this regard.  Certain of
Softworks' products compete with products from Boole & Babbage, Legent Corp. and
BMC, and while the Company believes that Softworks' products compete effectively
based on quality of product,  support and price,  no assurances  can be given in
this regard.  Many of the Company's existing and potential  competitors  possess
substantially  greater  financial,  marketing and technology  resources than the
Company.

     6.  Current  Litigation.  The  Company  and  certain  of its  officers  and
directors are parties to several lawsuits including one class action claim which
has been settled but is still waiting for final adjudication.  While the Company
intends to vigorously defend these actions, any substantial judgment against the
Company  would have a material  adverse  effect on its  financial  condition and
threaten the Company's viability.  The Company also settled a prior
class action claim in 1996. See "Business - Legal Proceedings."

     7. Seasonality. The Company's quarterly results are subject to fluctuations
from a wide  variety of  factors  including,  but not  limited  to, new  product
introductions,   domestic  and  international   economic  conditions,   customer
budgetary  considerations,  the timing of product  upgrades and customer support
agreement  renewal cycles. As a result of the foregoing  factors,  the Company's
operating results for any quarter are not necessarily  indicative of results for
any future period.

     8.  Dependence  on Key  Personnel.  The Company is highly  dependent on its
executive officers and management personnel,  the loss of any of whom could have
an  adverse  affect  upon its  operations.  While  the  Company  has  employment
agreements with several management persons, it has no employment agreements with
its  principal  executive  officers.  Should any of the members of the Company's
senior  management  be unable or unwilling to continue in their present roles or
should such person  determine to enter into  competition  with the Company,  the
Company's prospects could be adversely  affected.  The Company's success is also
dependent  upon its  ability  to  attract,  retain and  motivate  highly-trained
technical,  marketing, sales and management personnel. The inability to attract,
retain  and  motivate  personnel  required  for  development,   maintenance  and
expansion of the Company's  activities  could adversely  affect its business and
prospects.

     9. Substantial  Number of Outstanding Shares of Common Stock and Volatility
in Trading Price.  The Company has  approximately  133,629,276  shares of Common
Stock outstanding as of January 16, 1998 approximately 109,000,000 are currently
without  restriction  on  resale,  an  additional   9,589,869,   11,754,530  and
11,855,155  shares and shares  issuable  upon  exercise of options were recently
registered on Forms S-1/A,  S-1 and S-8,  respectively in addition to the shares
being  registered  herein.  Certain  of these  shares  were  issued  in  private
transactions for which the Company issued price guarantees. Although the Company
has no immediate  acquisition plans,  potential future acquisitions could result
in the issuance of substantial  additional  shares of Common Stock. The price of
the  Company's  Common Stock is subject to  fluctuation  and has  increased  and
decreased  substantially during 1995, 1996 and 1997. The trading activity in the
Company's Common Stock also varies from time to time so that, at any given time,
the sale of a large block could adversely  affect the market price of its Common
Stock.

     10. Risk of Rapid Growth and Business Expansion.  The Company is pursuing a
rapid growth  strategy  that has involved and is expected to continue to involve
significant  growth  over at  least  the next  twelve  months.  There  can be no
assurance  that the  Company  will  successfully  achieve  its  planned  growth.
Accomplishing its objectives will depend upon a number of factors, including the
Company's   ability  to  develop  products   internally  with  emphasis  on  the
exploitation  of its  d.b.Express  product.  In addition,  the Company may incur
development,  acquisition or expansion costs that represent a higher  percentage
of total revenues than larger or more established companies, which may adversely
affect the Company's results of operations.

     11. No Credit Facility. The Company has no credit facility and has no other
significant  assets other than account  receivables  which would be available to
collateralize any future borrowings.  Accordingly,  the Company's business could
be  adversely  affected  in the event  that it has a need for  funds in  amounts
greater  than its cash on hand,  which it is unable to  obtain  through  debt or
equity financing.

     12. No  Dividends.  The  Company  has not  declared  or paid,  and does not
anticipate  declaring or paying in the foreseeable future, any cash dividends on
its Common  Stock.  The Company's  ability to pay  dividends is dependent  upon,
among other things,  future earnings,  the operating and financial  condition of
the Company,  its capital  requirements,  general business  conditions and other
pertinent  factors,  and is subject to the discretion of the Board of Directors.
Accordingly,  there is no assurance  that any dividends will ever be paid on the
Company's Common Stock.

     13. Importance of and Risks Relating to Intellectual  Property Rights.  The
computer  software  industry is  characterized  by extensive use of intellectual
property  protected by copyright,  patent and trademark laws.  While the Company
believes that it does not infringe on the  intellectual  property  rights of any
third  parties  in  the  conduct  of  its  business,  allegations  of  any  such
infringement, or disputes or litigations relating thereto, could have a material
adverse affect on the Company's business and financial condition. Also, if third
parties were to be permitted to use the Company's proprietary technology without
the Company's  consent or without the Company being  compensated  therefor,  the
Company  believes that one of its  competitive  advantages  could be eroded.  No
assurance  can  be  given  that  the  Company's   patents  and  copyrights  will
effectively  protect the Company from any copying or emulation of the  Company's
products in the future.

     14.  Lack of  Managing  Underwriter.  The sale of the  Common  Stock of the
Selling  Stockholders  will  not be  coordinated  or  controlled  by a  managing
underwriter.  Certain Selling Stockholders may be deemed to be underwriters,  as
such term is defined by the Securities Act. Selling  Stockholders  will,  during
the distribution  period, also be subject to the restrictions on their purchases
and sales of  Common  Stock as set  forth in Rules  10b-6  and  10b-7  under the
Exchange Act. See "Selling Security holders" and "Plan of Distribution."

     15.  Potential  Impact  If Rule 15G  Becomes  Applicable  to the  Company's
Securities. Rule 15G of the Securities Act of 1934 provides certain requirements
for the sale of  securities  which  are  classified  as "penny  stocks."  As the
Company exceeds the asset and revenue  parameters for  classification as a penny
stock  (less than $2 million of tangible  assets or $6 million of  revenues  for
companies in business  more than three years) and trades on the NASDAQ  exchange
(Small Cap Market)  those rules are not  currently  applicable  to the  Company.
However,  in the event, the Company were to be so classified in the future,  the
compliance  requirements  for the sale of securities under Rule 15G could have a
negative effect on the marketability of the Company's securities.

     16.  Potential Loss of Entire  Investment in the Company's  Securities.  An
investment  in the  securities  of the  Company  involves a high degree of risk,
including the potential total loss of the investment.

                                 USE OF PROCEEDS

     The Company will not receive any proceeds from this offering, except to the
extent  options  or  warrants  are  exercised  for cash to  purchase  any of the
420,000  shares  covered  by  this  Prospectus  underlying  stock  options  or
warrants. The net proceeds to the Company, if all outstanding options (including
options not covered by this  Prospectus)  are exercised,  will be  approximately
$10,400,000.  Substantially  all of such  funds,  if  any,  are  intended  to be
utilized  to further  exploit  the  Company's  products,  including  the working
capital and general overhead expenses associated therewith.

                           PRICE RANGE OF COMMON STOCK

     The Company's  Common Stock is traded on NASDAQ under the symbol CCEE.  The
following  table sets forth the high and low sales prices of the Common Stock as
reported on NASDAQ for the fiscal periods indicated. See "Dividend Policy".
Common Stock
                                                                  High         Low
      1994
      ----
First Quarter . . . . . . . . . . . . .                   5 3/8          2 1/2
       Second Quarter. . . . . . . . . . . . .                 2 15/16          1 1/8
       Third Quarter . . . . . . . . . . . . .                   1 5/8          15/16
       Fourth Quarter. . . . . . . . . . . . .                  1 5/16            5/8

      1995
      ----
       First Quarter . . . . . . . . . . . . .                  1 1/32           7/16
       Second Quarter. . . . . . . . . . . . .                 4 31/32            1/4
       Third Quarter . . . . . . . . . . . . .                       2          1 3/8
       Fourth Quarter. . . . . . . . . . . . .                   3 1/2         1 9/32

      1996
      ----
       First Quarter . . . . . . . . . . . . .                 2 27/32        1 23/32
       Second Quarter  . . . . . . . . . . . .                  2 1/16             1
       Third Quarter . . . . . . . . . . . . .                  1 5/16         17/32
       Fourth Quarter. . . . . . . . . . . . .                   25/32           5/16
1997
      ----
       First Quarter . . . . . . . . . . . . .                  1 1/32          19/32
       Second Quarter  . . . . . . . . . . . .                   23/32            1/2
       Third Quarter . . . . . . . . . . . . .                   51/64            3/8
       Fourth Quarter  . . . . . . . . . . . .                   29/32          15/32

      1998
      ----
       First Quarter  (to January 16, 1998). .                    9/16          13/32
As of October 3, 1997, the total number of  shareholders of the Company's
Common Stock was approximately  20,200, with 1,700 holders of record,  exclusive
of  shareholders  whose  shares  are held in the name of their  brokers or stock
depositories   which  are  estimated  to  be  approximately   18,500  additional
shareholders.

                                 DIVIDEND POLICY

     Holders of the  Company's  common stock are entitled to dividends  when, as
and if  declared  by the  Board  of  Directors  out of funds  legally  available
therefor.  The Company does not  anticipate  the  declaration  or payment of any
dividends in the foreseeable future. The Company intends to retain earnings,  if
any, to finance the development  and expansion of its business.  Future dividend
policy will be subject to the  discretion  of the Board of Directors and will be
contingent  upon future  earnings,  if any, the Company's  financial  condition,
capital requirements,  general business conditions and other factors. Therefore,
there can be no assurance that any dividends of any kind will ever be paid.

                                 CAPITALIZATION

     The  following  table  sets  forth the  capitalization  of the  Company  at
September 30, 1997:
Current Portion of Long-Term Debt. . . .              $453,000
     Long-term debt . . . . . . . . . . . . .               280,000

       Stockholders' Equity:

       Common Stock, $.0001 par value; 150,000,000
       shares authorized; 125,535,000 shares issued
       and outstanding . . . . . . . . . . . . . . .         13,000

       Additional paid-in capital. . . . . . . . . .     90,839,000
       Accumulated Deficit . . . . . . . . . . . . .    (82,355,000)

    Total Stockholders' Equity . . . . . . . . . .        8,497,000

    Total Capitalization . . . . . . . . . . . . . .      8,777,000
As of January 16, 1998, 133,629,276 shares are outstanding, and options and
warrants are outstanding for an aggregate 13,164,229 additional shares including
all shares authorized for issuance under the various stock incentive plans.
* * *
                             SELECTED FINANCIAL DATA
                      (in thousands, except per share data)

     The selected  financial  data as of December 31, 1996 and 1995 and for each
of the three years in the period ended  December  31,1996 , has been  abstracted
from the audited financial  statements of the Company included elsewhere herein;
the selected  financial data as of December 31, 1994, 1993 and 1992 and for each
of the two years in the period ended December 31, 1993, has been abstracted from
audited financial  statements of the Company not presented herein.  The selected
financial  data as of  September  30,  1997,  and 1996,  and for the nine  month
periods  then  ended,  are  derived  from  the  Company's   unaudited  financial
statements,  and, in the opinion of  management  have been  prepared on the same
basis as the Company's audited consolidated financial statements and include all
adjustments,  consisting  of  normal  recurring  items,  necessary  for  a  fair
presentation  of such interim  financial data. The results of operations for the
interim  periods  presented  are  not  necessarily   indicative  of  results  of
operations  that may be expected  for the year ending  December  31,  1997.  The
selected  financial  data  should be read in  conjunction  with  such  financial
statements  and  related  notes  included   elsewhere  in  this  Prospectus  and
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations."  All share and per share  data has been  adjusted  to  reflect  the
one-for-four stock split approved by the Company's shareholders on September 22,
1992.

        Summary Consolidated Statement of Operations Data
Nine Months Ended
                                September 30,           Year Ended December 31,
                                -------------           -----------------------   
                               (in thousands, except per share data)

                                1997      1996      1996      1995      1994      1993      1992
                                ----      ----      ----      ----      ----      ----      ----
Revenues                       $19,931   $12,144   $19,030   $16,302   $13,695   $3,360   $    97
                               -------   -------   -------   -------   -------   -------  -------
Total costs and expenses        32,455    21,418    35,173    34,667    25,474   16,699     5,074
                               -------   -------   -------   -------   -------   -------  -------
Operating loss                $(12,524)  $(9,274)  (16,143)  (18,365)  (11,779) (13,339)  (4,977)
Other income (expense)            (475)   (2,810)   (2,810)     -         (428)    (111)       1
                               -------   -------   -------   -------   -------   -------  -------
Net loss                      $(12,999) $(12,084) $(18,953) $(18,365) $(12,207)$(13,450) $(4,976)
                               =======   =======   =======   =======   =======   =======  =======

Net loss per share               $(.12)    $(.18)   $(0.27)   $(0.37)   $(0.51)  $(0.86)  $(0.40)
                               =======   =======   =======   =======   =======   =======  =======

Weighted average common 
shares outstanding             106,897    66,052    71,301    49,211    24,110   15,721   12,332
                               =======   =======   =======   =======   =======   =======  =======
Summary Consolidated Balance Sheet Data
At September 30,         At December 31,
                                ----------------         ---------------
                                 (In thousands)

                               1997     1996     1996      1995      1994      1993     1992    
                               ----     ----     ----      ----      ----      ----     ----
Working capital (deficit)     $1,334   $3,694   $2,809   $(2,998)   $(3,590)  $2,545   $(610)
Total assets                  33,737   25,265   27,671    16,081     21,609   20,607   4,044
Long term debt                   280    2,695      526       800        695      172     163
Long term debt - current 
portion                          453      381      458       359        119       53      26
Common stock subject to 
redemption                        -        -                4000       4000       -       -
Shareholders' equity           8,497    6,385     9524      2009       7839    12168    2010
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     The following  discussion should be read in conjunction with the historical
financial statements of the Company included elsewhere in this Prospectus.

Results of Operations
---------------------

For the Three and Nine Months Ended September 30, 1997, and 1996
----------------------------------------------------------------

Business Description
--------------------

     Computer Concepts Corp. and subsidiaries (the "Company")  design,  develop,
market and support  information  delivery software products,  including end-user
data access tools for use in personal  computer and  client/server  environments
and systems management  software products for corporate  mainframe data centers.
The Company has  recently  entered  into the  Information  Services / technology
infrastructure  service business.  The Company's  principal market is the United
States.  Overseas revenues are principally  generated from European subsidiaries
and distributors.

     The Company  currently  consists of three operating units or product lines:
d.b.Express,  Softworks,  and a newly formed business unit. d.b.Express provides
businesses  with  a  simple,  fast,  low-cost  method  of  finding,  organizing,
analyzing and using information  contained in databases through a visually-based
proprietary  software tool.  Softworks,  provides  systems  management  software
products  that  optimize   mainframe   system   performance,   reduce   hardware
expenditures,   and  enhance  the  reliability  and  availability  of  the  data
processing environment.  Products marketed by Softworks include technology which
addresses  the year 2000  problem.  During the nine months ended  September  30,
1997, the Company commenced  operations of a new business unit which is designed
to provide a wide array of  information  technology,  support and services.  The
Company has employed an individual,  formerly with I.B.M.,  having  expertise in
this field and intends to capitalize on his  experience  and competency in order
to create a unique,  single  management  infrastructure  to support an extensive
selection of services and vendors.  The  Company's  new business line will offer
solutions,  support,  and  strategies to solve various  business  crises in such
areas as: network determinations,  help desk applications,  wiring/cabling,  LAN
connections,  moves/adds/changes,  and  project  management.  Additionally,  the
Company will oversee new  installations  as well as offering  on-site  component
repair.  The method of revenue  recognition  will be dependent upon the type and
manner of service provided.

Results of Operations
---------------------

Three and Nine Months Ended September 30, 1997 Compared with September 30, 1996
-------------------------------------------------------------------------------

     Revenues for the quarter ended  September  30, 1997,  were  $6,657,000,  an
increase of $2,344,000  over revenues for the quarter ended  September 30, 1996,
while for the nine months ended September 30, 1997, and 1996, revenues increased
$7,787,000 from $12,144,000 to $19,931,000.  For the quarter ended September 30,
1997, revenues increased at Softworks by $2,816,000, while decreases in revenues
of $472,000  resulted  primarily  from the closure of certain  subsidiaries  and
product lines.  Year to date increases of $7,138,000 and $1,432,000 at Softworks
and Computer  Concepts  respectively,  were offset by decreases of $783,000 from
the closure of certain  subsidiaries and product lines. The increase in revenues
at Softworks is due primarily to the release of new products and expanded sales
and marketing  efforts.  The increase at Computer Concepts is principally due to
the revenues generated from its new special services division.

     The cost of revenues and technical support increased $471,000 to $1,825,000
for the quarter ended  September  30, 1997,  as compared to  $1,354,000  for the
prior year quarter and by  $3,075,000  to  $7,046,000  for the nine months ended
September 30, 1997,  from  $3,971,000 for the prior year nine month period.  The
principal  factors for these increases  include the release of new product lines
and added  technical  support for ten  additional  sales offices at Softworks as
well as the costs associated with the new special services  division at Computer
Concepts.

     Research and  development  costs  increased  $926,000 to $1,254,000 for the
quarter ended  September 30, 1997 from $328,000 for the prior year quarter,  and
increased $1,901,000 to $2,905,000 for the nine months ended September 30, 1997,
from  $1,004,000  for the prior  year nine month  period.  R&D  activities  were
devoted  to  further  develop  current  product  technologies,  as  well  as the
development of technologies pertaining to the Year 2000 problem.

     Sales and marketing  expenses  increased  approximately  $3,205,000 for the
quarter ended  September 30, 1997, to $5,744,000  from  $2,539,000 for the prior
year.  This  increase is primarily  due to Softworks'  domestic  expansion,  the
creation of additional international  subsidiaries and its efforts to market and
promote Year 2000  technologies.  Additional  expenses incurred were a result of
increased  efforts  to  market  d.b.Express  For the  nine  month  period  ended
September 30, 1997,  expenses  increased  when compared to the nine months ended
September 30, 1996 by $5,908,000, primarily due to factors mentioned above.

     General and  administrative  costs increased $792,000 to $2,413,000 for the
three months ended  September  30, 1997,  when  compared to  $1,621,000  for the
quarter ended  September 30, 1996,  and by $2,004,000 to $7,119,000 for the nine
months ended  September  30,1997 from $5,115,000 for the nine month period ended
September 30, 1996. The principal  factors  contributing  to these increases has
been the additional  overhead  costs  associated  with the increased  efforts to
market d.b.Express and technologies associated with the Year 2000 problem, along
with  non-cash  compensation  awards  made to certain  officers,  employees  and
consultants.

     See  Note  3  to  the  condensed   consolidated  financial  statements  for
discussion  relating to the non-cash  interest charge pertaining to the discount
on convertible debentures.

     See  Note  5  to  the  condensed   consolidated  financial  statements  for
discussion relating to the unusual charges incurred during the nine months ended
September 30, 1997. For the quarter ended March 31, 1996,  the Company  recorded
an unusual  charge to earnings of  $2,075,000  as a result of a settlement  of a
class action suit.

Financial Condition and Liquidity
---------------------------------

     The Company has  incurred  consolidated  net losses of  $4,780,000  for the
three months ended  September  30, 1997,  $12,999,000  for the nine months ended
September 30, 1997, and cumulative net losses of $82,355,000  through  September
30,  1997.  Further,  the  Company  has  incurred  consolidated  net  losses  of
$18,953,000,  $18,365,000  and  $12,207,000  during the years ended December 31,
1996,  1995, and 1994,  respectively.  For the nine month period ended September
30, 1997, net cash used in operating  activities was $5,872,000,  reflecting the
above net loss being offset by various  non-cash items and changes in assets and
liabilities described in the accompanying  condensed  consolidated  statement of
cash flows.  The Company's cash  requirements  were primarily  financed  through
current and prior year sales of  convertible  debentures,  sales of common stock
and funds generated from Softworks' operations.
The  Company  does not  maintain  a  credit  facility  with  any  financial
institution.  The Company  has  continued  to incur  significant  expenses  with
respect to the development and marketing of its d.b.Express  product  technology
without generating any significant  revenues. As a result of continued operating
losses,  the use of  significant  cash in operations  and the lack of sufficient
funds to execute its business plan,  among other  matters,  there is substantial
doubt about the Company's ability to continue as a going concern. No adjustments
have been made with respect to the condensed  consolidated  financial statements
to record the results of the ultimate outcome of this uncertainty.

     Management's  plans to remain a going concern,  as more fully  described in
these notes,  require  additional  financing  until such time as sufficient cash
flows are generated from operations.  During the nine months ended September 30,
1997, the Company received  approximately  $3,865,000 (less commissions and fees
of $484,000)  from the sale of  convertible  debentures,  and  $3,000,000  (less
commissions  and fees of $240,000) from the sale of common stock.  See Note 3.a.
to the condensed  consolidated  financial statements.  The Company also received
$2,140,000 (less  commissions and fees of approximately  $160,000) from the sale
of common stock in January, 1998.

     There  can be no  assurances  that  the  Company  will be  able  to  obtain
sufficient  financing to execute its business plan. The Company's primary source
of revenue continues to be derived from its Softworks  subsidiary.  Management's
plans to remain a going  concern rely upon  achieving  positive  cash flows from
operations  through  the  continued  growth  of  Softworks  and  the  successful
exploitation of the Company's d.b.Express product.  While to date, revenues from
d.b.Express have been  insignificant,  management  believes that its proprietary
software  technology  has  significant  potential in several  areas,  and solves
certain  significant  business  issues in the  telecommunications  and  internet
related markets.  In order to realize the potential of this product,  management
will need to  aggressively  pursue all  marketing  opportunities.  To date,  the
Company  has  incurred  significant  losses  (both cash  expenses  and  non-cash
expenses) as a result of the development and marketing of d.b.Express. There can
be no assurances that the Company will be successful in achieving  positive cash
flows from  operations  with  respect to the  d.b.Express  product.  The Company
continues to pursue license and development  agreements with various  companies.
While none of the Company's  existing  agreements or development  opportunities,
that relate to d.b.Express, provide sales commitments,  (excepting therefrom the
recent  agreement with a major  telecommunicatons  company which provides for in
excess of $700,000 and revenue sharing thereafter), management believes that the
successful exploitation of its d.b.Express technology,  as well as the continued
growth of Softworks, will eventually enable the Company to achieve positive cash
flows from operations.  Unless the Company determines to discontinue its pursuit
of d.b.Express revenues (which requires significant  financial  resources),  the
Company will need to generate  positive cash flows from operations from the sale
of  d.b.Express  product in order to decrease its  dependency on cash flows from
financing  activities  and remain a going  concern.  At November 10,  1997,  the
Company had cash and cash equivalents of approximately  $1,674,000.  Ultimately,
however,  positive  cash flows from  operations  will be  necessary  in order to
curtail the Company's reliance on equity placements.

     In  connection  with the 1993  acquisition  of  Softworks,  the  Company is
required to make additional  payments to two of Softworks' former  shareholders,
based upon certain  product  revenues for the years 1995 through  1998,  up to a
maximum of $1,000,000  each,  for an aggregate  maximum of  $2,000,000.  Through
September  30,  1997,  the  Company  has  incurred  an  aggregate  liability  of
$1,409,000,  (of which  $1,289,000  has been  paid) to the  non-employee  former
shareholders,  which has been treated as additional  consideration in connection
with the acquisition, and, accordingly,  included in the excess of cost over the
fair value of net assets acquired,  as these individuals did not continue in the
employment of the Company  subsequent to the  acquisition.  No other  contingent
payments have been made under the terms of this agreement.
In July,  1997,  the Company  completed a transaction  in which it sold all
rights to the underlying software  technologies of its Maplinx, Inc. subsidiary.
Further,  as part of the  transaction,  the  purchaser  acquired all of Maplinx'
current  assets  and  assumed  all  of  its  liabilities.  The  sales  price  of
approximately  $850,000 was adjusted (reduced) by the excess of Maplinx' current
liabilities  over current assets  (approximately  $380,000),  resulting in a net
sales price of $470,000. Approximately $235,000 was paid at closing, the balance
of $235,000 plus  interest is due six months from  closing.  As a result of this
transaction, the Company recognized a gain on the sale of net assets of $813,000
in the quarter ended September 30, 1997.

     The Company is a defendant in several  lawsuits and class action  claims as
described in Note 5.c. Based on consultation with legal counsel, the Company and
its officers believe that meritorious  defenses exist regarding the lawsuits and
claims, and they are vigorously  defending against the allegations.  The Company
is unable to predict  the  ultimate  outcome of the  claims,  which could have a
material  adverse effect on the consolidated  financial  position and results of
operations of the Company.  Accordingly,  except as expressly  discussed herein,
the financial  statements do not reflect any adjustments  that might result from
the ultimate outcome of these litigation matters.

     Softworks  sells  perpetual  and  fixed  term  licenses  for its  mainframe
products,  for  which  extended  payment  terms of three  to five  years  may be
offered.  In the case of  extended  payment  term  agreements,  the  customer is
contractually  bound to equal  annual  fixed  payments.  The first  year of post
contract customer support (PCS) is bundled with standard license agreements.  In
the case of extended payment term  agreements,  PCS is bundled for the length of
the payment term. Thereafter,  in both instances,  the customer may purchase PCS
annually. At September 30, 1997, the amount of such future receivables extending
beyond one year was  approximately  $6,980,000,  and is included in  installment
accounts receivable, due after one year and deferred revenues.

For the Years Ended December 31, 1996, 1995 and 1994
----------------------------------------------------

Financial Condition and Liquidity
---------------------------------

     The  Company  has  incurred   consolidated   net  losses  of   $18,953,000,
$18,365,000 and  $12,207,000  during the years ended December 31, 1996, 1995 and
1994,  respectively,  and cumulative net losses of $69,356,000  through December
31, 1996. As of December 31, 1996,  the Company's  current  assets  exceeded its
current  liabilities  by  $2,809,000.  For the year ended December 31, 1996, net
cash used in operating  activities  was  $4,994,000.  Net cash used in operating
activities for 1996 was less than the Company's  total net loss primarily due to
non-cash  expenses  including  common  stock and options  issued for services of
$3,446,000,  common  stock  issued  subject  to  forfeiture  of  $1,508,000  and
amortization and
depreciation of $3,684,000.  In addition, as more fully described in Note 7, the
Company recorded a non-cash  interest charge  associated with certain  financing
activities  of  $2,810,000  and, as  described  in Note 11,  recorded a non-cash
unusual charge of $2,000,000  related to the  settlement of certain  litigation.
Cash  was  also  used  for  certain  investing   activities   including  capital
expenditures of $832,000 and the purchase of software  technologies of $526,000.
These  uses of cash  were  primarily  financed  through  the  sales  convertible
debentures,   common  stock  and  exercises  of  stock   options   approximating
$11,928,000, net of commissions.

Management's Plan to Continue as a Going Concern
------------------------------------------------

     Although  the  Company's  liquidity  position at  December  31,  1996,  was
adversely  affected by the Company's  continuing  losses,  the equity placements
during the year then ended have enabled the Company to continue  operating.  The
Company  does not maintain a credit  facility  with any  financial  institution.
Management's  plans to remain a going concern,  as more fully  described  below,
require additional financing. This financing is anticipated to be in the form of
equity and convertible debenture investments, however there can be no assurances
that the  Company  will be able to obtain  sufficient  financing  to execute its
plan. As a result of the continuing operating losses, and the lack of sufficient
funds to  execute  its  business  plan,  there is  substantial  doubt  about the
Company's ability to continue as a going concern.  No adjustments have been made
with respect to the consolidated  financial  statements to record the results of
the ultimate outcome of this uncertainty.

     Management's  plans to remain a going concern rely upon achieving  positive
cash flows from  operations  through the  continued  growth of Softworks and the
successful exploitation of the Company's d.b.Express  technology.  The Company's
primary source of revenue continues to be derived from its Softworks subsidiary.
While to date,  revenues from  d.b.Express have been  insignificant,  management
believes that its proprietary  software technology has significant  potential in
several  areas,   and  solves  certain   significant   business  issues  in  the
telecommunications  and  Internet  related  markets.  In  order to  realize  the
potential  of this  product,  management  will need to  aggressively  pursue all
marketing  opportunities.  To date, the Company has incurred  significant losses
(both cash  expenses  and  non-cash  expenses as  described  in the Notes to the
Consolidated  Financial Statements) as a result of the development and marketing
of  d.b.Express.  The  Company  continues  to  pursue  license  and  development
agreements  with  various  companies.  While  none  of  the  Company's  existing
agreements or development  opportunities  provide sales commitments,  (excepting
therefrom  the recent  agreement  with a major  telecommunicatons  company which
provides for in excess of $700,000 and revenue sharing  thereafter),  management
believes that the successful  exploitation  of its  d.b.Express  technology will
eventually  enable the Company to achieve  positive cash flows from  operations.
There can be no  assurances  that the Company  will be  successful  in achieving
positive cash flows from  operations  with respect to the  d.b.Express  product.
Unless the Company determines to discontinue its pursuit of d.b.Express revenues
(which  requires  significant  financial  resources),  the Company  will need to
generate  positive  cash  flows  from  operations  from the sale of  d.b.Express
product  in order to  decrease  its  dependency  on cash  flows  from  financing
activities and remain a going concern.

     Growth of the Company's Softworks subsidiary is anticipated to continue for
its existing product line, as well as from its new Year 2000 and  multi-platform
products,  and the  Company  anticipates  that  during  the first  half of 1997,
Softworks will release its first multi-platform systems management products with
a suite of products under the name  CenterStage/MP  which are being developed to
resolve storage issues  regardless of platform,  and to expand Softworks' market
beyond the  mainframe  segment.  The Company  believes  Softworks'  products are
positioned to meet the market demand for systems management software.

     The software  products being  developed for the Year 2000 simplify the Year
2000 conversion  process by providing tools to help with the critical  processes
of  identifying,  diagnosing and  simulating  millennium  issues  throughout the
mainframe  environment.  Management  believes  this  product line will result in
additional cash flows which will help to defray the Company's consolidated costs
of operations;  however, there can be no assurances as to the volume of revenues
which will be generated from this product line.

     Management  believes  that the  successful  exploitation  of the  Company's
d.b.Express  technology,  the continuing success of the Softworks'  subsidiary's
existing   product  line  and  the  launching  of   Softworks'   Year  2000  and
multi-platform  technologies,  among other things,  should enable the Company to
eventually achieve positive cash flows from operations. The long-term success of
the Company,  under its existing business plan, is dependent upon the continuing
successful  domestic and  international  growth of Softworks,  and the Company's
ability to generate material d.b.Express revenues. Due to the recent success and
rapid  growth  of the  Company's  Softworks'  subsidiary,  management  no longer
believes  that  the  Company's  future  success  is  solely  dependent  upon the
successful exploitation of the d.b.Express technology.  Entry into the Year 2000
and  multi-platform  markets  through  its  Softworks  subsidiary  and  into the
Internet  market with the Company's new JAVA based Internet  access  technology,
also opens additional markets for potential future sales.

     Softworks  sells  perpetual  and  fixed  term  licenses  for its  mainframe
products,  for  which  extended  payment  terms of three  to five  years  may be
offered.  In the case of  extended  payment  term  agreements,  the  customer is
contractually  bound to equal  annual  fixed  payments.  The first  year of post
contract support (PCS) is bundled with standard license agreements.  In the case
of  extended  payment  term  agreements,  PCS is  bundled  for the length of the
payment  term.  Thereafter,  in both  instances,  the  customer may purchase PCS
annually.  Revenues with respect to such extended payment terms are deferred and
recognized  over the period of the  installment  payment  plan.  At December 31,
1996,  the  amount of such  future  receivables  extending  beyond  one year was
$3,714,000,  and is included in installment accounts  receivable,  due after one
year and deferred revenues in the accompanying  consolidated  balance sheet. All
of the Company's products and internal software are year 2000 compliant, and the
Company does not believe  continuing  compliance  will have a material impact on
the Company.

Impending Changes in Accounting

     There are four impending accounting  pronouncements that potentially impact
the financial accounting and/or reporting of the Company.  Statement of Position
97-2,  "Software  Revenue  Recognition"  ("SOP  97-2"),  Statement  of Financial
Accounting  Standards No. 128,  "Earnings Per Share" ("SFAS 128"),  Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income"" ("SFAS
130"),  and Statement of Financial  Accounting  Standards No. 131,  "Disclosures
About Segments of an Enterprise and Related Information" ("SFAS 131").

     SOP 97-2,  which  was  issued  to  provide  further  guidance  on  applying
generally  accepted  accounting  principles  to software  transactions,  becomes
effective for transactions  entered into beginning in 1998.  Initial adoption of
this  statement  may only be on a  prospective  basis.  The Company is currently
reviewing the impact that adopting this statement  will have on future  reported
operations.

     SFAS 128  establishes  new standards for computing and presenting  earnings
per share which  simplifies the previous  standards and makes them comparable to
international  standards.  This statement becomes  effective  beginning with the
Company's  quarter  ending  December 31, 1997,  and requires  restatement of all
prior-period  earnings per share data.  The Company is currently  reviewing the
impact of adopting this statement.  Since the Company's common stock equivalents
are  antidilutive,  it is not expected that adoption will have a material impact
on the consolidated financial statements.

     SFAS  130,   which   presents   standards  for  reporting  and  display  of
comprehensive  income and its components,  becomes  effective for the Company in
1998 with  reclassifications  made to previous  years  required.  The Company is
currently reviewing the impact that adopting this statement will have on future
financial presentations.  Since the Company does not have material components of
other  comprehensive  income,  it is not  expected  that  adoption  will  have a
material impact on the consolidated financial presentation.

     SFAS 131, which presents standards for determining a reportable segment and
for disclosing  information  regarding each such segment,  becomes effective for
the Company in 1998 with  reclassifications made to previous years required. The
Company is currently reviewing the impact that adopting this statement will have
on future financial  statement  disclosures.  Since the Company believes that it
operates in one industry  segment,  it is not expected that adoption will have a
material impact on the consolidated financial statement disclosures."
Results of Operations

     Fiscal 1996 Compared to Fiscal 1995

     Revenues for the year ended December 31, 1996 were $19,030,000, an increase
of  $2,728,000 or 17% over the prior years total of  $16,302,000.  This increase
was  primarily  due to the increase in  Softworks'  revenues of  $4,899,000  and
d.b.Express  revenues  of  $180,000,  offset by  reductions  in net  revenues of
MapLinx of $1,560,000 and discontinued subsidiaries of $840,000.

     Cost of revenues and technical support, of $5,944,000 represents a decrease
of  $1,130,000  from the prior year's amount of $7,074,000  due  principally  to
reduced  costs  incurred by MapLinx of $407,000  and by the  discontinuation  of
Superbase and CCEL  operations  of  $1,320,000,  offset by increases  related to
d.b.Express of $681,000.

     During  1996,  sales  and  marketing  expenses  for the  Company  increased
$3,872,000 to $13,038,000  from $9,166,000 for the year ended December 31, 1995.
The increase was due, in part,  to Softworks  efforts in  establishing  overseas
operations of $2,319,000. The remaining portion of the increase was attributable
to d.b.Express.

     General and administrative  expenses decreased $182,000,  to $8,009,000 for
the year ending December 31, 1996 versus $8,191,000 for the year ending December
31, 1995.  The decrease was  principally  due to  discontinued  subsidiaries  of
$1,053,000,  reductions by MapLinx of $50,000,  offset by increases at Softworks
of $723,000 and costs associated with d.b.Express of $384,000.

      Research and development  costs  increased  $226,000 in 1996 to $1,496,000
over the prior year's amount of  $1,270,000,  due  principally to refinements in
d.b.Express technology.
See Note 9 to the  Consolidated  Financial  Statements  for a discussion of
unusual charges  incurred for the years ended December 31, 1996, 1995, and 1994,
respectively.

     The reduction in carrying  value of long-lived  assets of $412,000 in 1996,
pertains to the write-down of MapLinx intangible assets.

     Fiscal 1995 Compared to Fiscal 1994

     Revenues  for the year  ended  December  31,  1995,  were  $16,302,000,  an
increase of  $2,607,000 or 19% over the prior years total of  $13,695,000.  This
increase  was  primarily  due to the  acquisition  of  MapLinx  , which  had net
revenues  of  $3,780,000,  as well as an  increase  in  Softworks'  revenues  of
$2,177,000,  offset  by the  loss of  non-recurring  revenues  generated  by the
product  distribution  agreements  related to d.b.Express of $2,964,000 in 1994,
and reductions in net revenues of $313,000 and $305,000 from Superbase and CCEL,
respectively.

     Cost of  revenues  and  technical  support,  of  $7,074,000  represents  an
increase of $1,537,000 over the prior years amount of $5,537,000 due principally
to the MapLinx acquisition which incurred $1,211,000, and increases at Softworks
and CCEL of $1,396,000  and  $130,000,  respectively,  offset by decreases  from
d.b.Express and Superbase of $ 609,000 and $622,000, respectively.

     During  1995,  sales  and  marketing  expenses  for the  Company  increased
$3,316,000 to $9,166,000  from  $5,850,000 for the year ended December 31, 1994.
The  acquisition  of MapLinx  accounted  for  approximately  $2,013,000  of such
increase.  Other  material  components  include  an  increase  at  Softworks  of
$1,364,000  which was due,  in part,  to  Softworks  efforts to bring the DBopen
products to market, as well as establishing overseas operations.

     General and administrative  expenses increased $255,000,  to $8,191,000 for
the year ending December 31, 1995 versus $7,936,000 for the year ending December
31,  1994.  A major  effort  put forth by  management  of the  Company to reduce
Corporate spending resulted in a reduction of $478,000 over the prior year. This
was, however, offset by the acquisition of MapLinx, which was acquired effective
December 31, 1994, and incurred expenses amounting to $733,000 during the year.

     Research and  development  costs  increased  $749,000 in 1995 to $1,270,000
over the prior  years'  amount  of  $521,000,  due  principally  to  DBopen  and
refinements in d.b.Express technology.

     The charge to operations of $3,760,000 for the reduction in carrying values
of long-lived assets includes the write-down of the software asset held for sale
of  $2,440,000  and the  write-off of the DBopen  acquisition  of  approximately
$1,320,000, both of which are described in Note 3 Acquisitions,  of Notes to the
Consolidated Financial Statements.

Safe Harbor Statement

     Certain   information   contained  in  this  annual  report,   particularly
information  regarding  future  economic  performance  and  finances,  plans and
objectives  of  management,  is  forward-looking.  In  some  cases,  information
regarding  certain  important  factors that could cause actual results to differ
materially  from any such  forward-looking  statement  appear together with such
statement.  The following  factors,  in addition to other  possible  factors not
listed,  could  affect the  Company's  actual  results and cause such results to
differ  materially from those  expressed in  forward-looking  statements.  These
factors include competition within the computer software industry, which remains
extremely intense, both domestically and internationally,  with many competitors
pursuing price discounting;  changes in economic conditions;  the development of
new  technologies  and/or  changes in operating  systems which could obsolete or
diminish the value of existing  technologies  and  products;  personnel  related
costs; legal claims; risks inherent to rolling out new software and new software
technologies;  the current lack of adequate financial resources to carry out the
Company's  current  business plan in regard to the d.b.Express  technology;  the
potential cash and non-cash costs of raising  additional capital or the possible
failure to raise necessary capital;  changes in accounting principles applicable
to the Company's activities and other factors set forth in the Company's filings
with the Securities and Exchange Commission.

                                    BUSINESS

INTRODUCTION

     The Company was organized under the name Unique Ventures,  Inc. as a "blind
pool"  public  company,  under the laws of the State of  Delaware  on August 27,
1987, and changed its name to Computer Concepts Corp. in 1989. Computer Concepts
Corp. and its subsidiaries  (hereinafter  referred to as "Computer  Concepts" or
the "Company")  operate in the computer  software  industry  segment and design,
develop,  market and support information  delivery software products,  including
end-user   data  access  tools  for   personal   computers   and   client/server
environments,  and develops,  markets and supports systems  management  software
products for corporate mainframe data centers.

     Computer  Concepts has  incurred  consolidated  net losses of  $12,999,000,
$18,953,000,   $18,365,000   and   $12,207,000,   on  revenues  of  $19,931,000,
$19,030,000,  $16,302,000 and $13,695,000 during the nine months ended September
30, 1997,  and the years ended December 31, 1996,  1995 and 1994,  respectively,
and  cumulative  net losses of  $82,355,000  through  September 30, 1997.  These
operating losses have been  essentially  funded through the issuance of Computer
Concepts' common stock. Ultimately, however, positive cash flows from operations
will be  necessary  in order  to  curtail  the  Company  s  reliance  on  equity
placements.  While  there can be no  assurances,  management  believes  that the
successful   implementation   of  cost  saving   measures  and  the   successful
exploitation of the Company s d.b.Express technology, among other things, should
eventually  enable the Company to achieve  positive cash flows from  operations.
Management's  plans  to  remain  a  going  concern  (see  Note  1  of  Notes  to
Consolidated Financial Statements for the year ended December 31, 1996, and Note
2 of Notes to Condensed  Consolidated  Financial  Statements for the Nine Months
ended  September  30,  1997)  require  additional  financing  until such time as
sufficient cash flow from operations are generated.

GENERAL

     From 1989 until  September,  1993,  the  Company was  primarily  engaged in
developing its primary product,  "d.b.Express".  While continuing its efforts to
further  improve  and  market  d.b.Express,  the  Company  in late 1993 began to
implement a structured growth through acquisition plan to increase revenues,  by
developing and acquiring  additional  products for  distribution,  as well as to
penetrate  different  software market segments.  There have been no acquisitions
during  1996  and  1997  and none are  presently  planned,  however,  should  an
opportunity  present  itself  wherein,  in the best interest of the Company,  an
acquisition would be appropriate,  the Company would investigate the acquisition
possibilities. The Company, through its process of evaluating its businesses and
determining  where its strategic  focus and financial and  management  resources
should be directed,  continually  adjusts the value of certain assets to reflect
their net realizable value and management s current operating plan.
In October 1990, Computer Concepts acquired RAMP Associates, Inc. ("RAMP"),
a privately owned Delaware  corporation  engaged in general computer  consulting
services.  RAMP was  previously  owned by Russell  Pellicano,  the  inventor  of
d.b.Express,  and  currently an officer and director of the Company.  During the
fourth  quarter of 1993, in connection  with its long-term  strategic  plan, the
Company eliminated its general computer consulting service line, taking a charge
for the write-off of the  unamortized  goodwill  associated with RAMP as well as
the accrual of certain severance costs.

     Effective   September   1993,   the  Company   acquired   Softworks,   Inc.
("Softworks"),  a private  Maryland company founded in 1977, and an acknowledged
leader providing  systems  management  software for mainframe  computer systems.
Softworks currently markets twenty-four software products,  and holds over 2,400
licenses  in over 1,800  customer  installations  worldwide.  The  products  are
installed in  approximately  80 of the Fortune 100 companies  data centers.  See
Note 3 of Notes to Consolidated Financial Statements for the year ended December
31, 1996.

     In connection with the Company s business strategy,  during September 1993,
an agreement was entered into with Computer Concepts Europe,  Ltd. ("CCEL"),  an
exclusive non-affiliated  distributor formed predominantly to market d.b.Express
in one of the  world s largest  software  markets.  CCEL s focus was  promotion,
sales and support of the Company s products in major  European  markets.  During
August 1994, the Company  entered into an agreement to acquire CCEL. As a result
of  management  s  subsequent  decision to focus its  financial  and  management
resources  on  the  exploitation  of  d.b.Express   domestically,   the  Company
significantly curtailed its operations in Europe in order to focus its financial
and management  resources on the attainment of strategic  alliances and software
license agreements with major software companies,  resulting,  in the opinion of
management,  in much greater product revenues than direct selling could produce.
Accordingly, the Company wrote-off the carrying amount of this investment in the
fourth quarter of 1994

     During  June 1994,  the Company  completed  the  purchase of the  Superbase
technology  and certain  related  assets from Software  Publishing  Corporation.
Superbase is a database programming  language.  The Company attempted to develop
and market this asset without success in 1995. This software technology was sold
to a third  party  in the  second  quarter  of  1996.  See  Note 3 of  Notes  to
Consolidated Financial Statements for the year ended December 31, 1996.

     During December 1994, the Company acquired  MapLinx,  Inc.  ("MapLinx"),  a
provider of PC based  software  that  allows for  geographical  presentation  of
database information.  See Note 3 of Notes to Consolidated  Financial Statements
for the year ended December 31, 1996. In conjunction with the Company's decision
to focus its activities on exploitation  of the  d.b.Express  technology and its
Softworks subsidiary, the Company sold the net assets of MapLinx in 1997.

     During  December  1994,  through  its  Softworks  subsidiary,  the  Company
acquired DBopen, Inc. ("DBopen"), a provider of PC database administration tools
employing  client/server  technology.  During the third quarter of 1995, certain
new products  pertaining  to this  acquisition  were  introduced  in the market.
During the fourth  quarter of 1995,  as a result of limited  sales and  changing
market conditions,  it was determined that significant  additional  expenditures
would have to be incurred to modify the  product to meet these  changing  market
conditions. In the opinion of management,  such additional expenditures exceeded
the potential benefits, and, accordingly, a decision was made to discontinue the
products.  Consistent  with this  decision,  the Company  wrote-off the carrying
value of its  investment in the DBopen  acquisition  of $1,317,000 in the fourth
quarter of 1995.
The  Company's  long-term  strategic  plan  is  focused  upon  becoming  a
preeminent  provider of innovative  software  products which break down barriers
between people and data through sales of existing  products and new technologies
as well as continuing to support the  Softworks'  mainframe  sector . To achieve
its  goals the  Company  plans  growth  of  d.b.Express  primarily  through  the
development of vertical markets,  initially in the telecommunications  industry.
The Company s primary strategy will focus  principally on software tools for the
data  warehousing  markets and the  ability to access the data via the  Internet
without the need to download the data first.  These  markets are being driven by
wide-scale  corporate  right-sizing  and the  empowerment  of  people  to access
enterprise-wide  data, both of which create greater  efficiencies  and corporate
profits.  The  Company  also plans to  capitalize  on its new  business  unit by
providing  information  technology,  support and services by offering solutions,
support, and strategies to solve various business needs in such areas as network
determinations,   help  desk  applications,   wiring/cabling,  LAN  connections,
moves/adds/changes and project management.

     During the first quarter of 1995,  the Company  reorganized  its management
team. A new business plan was developed and implemented, with the major focus of
the new business plan being the development of strategic alliances, and securing
d.b.Express license agreements with major software companies, which has since be
refined to focus on the vertical market of the telecommunications  industry. The
first evidence of potential future success of this plan was announced on June 1,
1995,  regarding a development  agreement  with Oracle  Corporation  ("Oracle").
Thereafter, the Company also entered into development or license agreements with
International  Business Machines,  Inc. ("IBM"),  Dell Computers  ("Dell"),  and
Information Builders, Inc. ("Information Builders").  The Company was advised in
the second quarter of 1996 that Dell Computers had discontinued the distribution
of  d.b.Express.  None of  these  agreements  provide  for any  level  of  sales
commitment and to date sales from such agreements have been insignificant.

     In  December,  1995 the Company  formed what it considers to be a strategic
alliance with one of the world s largest  systems  integrations  and  consulting
organizations,  Perot Systems Corp. ("Perot Systems"),  headquartered in Dallas,
Texas.  This  agreement   permitted  Perot  Systems  to  market  and  distribute
d.b.Express,  not only to its present  customer base , but also to oversee world
wide distribution as well. Pursuant to this agreement, Perot Systems was to earn
30% percent  commissions on certain sales of d.b.Express and received options to
purchase up to 500,000 shares of the Company's  common stock at $2.56 per share.
Additionally, Perot Systems had the ability to increase their equity position in
the Company,  through the  exercise of up to an  additional  2,250,000  options,
based on  sales of  d.b.Express  in  excess  of  $5,000,000  up to  $50,000,000,
however,  as a result of a change in  management at Perot  Systems,  the Company
elected to  terminate  the  formal  agreement  between  the  Companies  and said
2,250,000 options are no longer contractually obligated.  Although the agreement
is no longer  effective,  the Company and Perot  Systems are  continuing to work
together on ongoing  proposals,  and commissions will be negotiated on a case by
case basis on  business  which may  result  from this  relationship.  During the
fourth  quarter of 1995,  the Company also entered into various other  marketing
and consulting agreements expiring at various dates through November,  2000. The
Company issued 1,678,000  options at $1.50 per share to purchase common stock in
connection with these agreements.  Subsequently, 1,000,000 of those options were
terminated  in exchange for 400,000  shares,  and 300,000 of those  options were
repriced to $.01 in 1997.  Pursuant to such  agreements,  certain firms have the
ability  to earn up to  600,000  options  at a price of  $1.50  per  share  upon
attaining  defined  levels  of  d.b.Express  product  revenues.  None  of  these
agreements provide for any level of sales commitment and to date sales from such
agreements have been insignificant. In November, 1997, the Company announced the
signing of an agreement  with a major  telecommunications  company from which it
anticipates  significant  d.b.Express  revenues  in  1998.  Due  to  contractual
restrictions,  the Company cannot presently  comment further on the terms of the
agreement,  but  anticipates  to be able to  release  more  details  in the near
future.
PRODUCTS

d.b.Express

     d.b.Express  provides  business  with a simple,  fast,  low-cost  method of
finding,  organizing,  analyzing  and using  information  contained in databases
through a  visually-based  proprietary  software  tool.  The software  employs a
unique  graphical user interface  ("GUI") that enables users to directly  access
and use  information  contained in relational  and  pseudo-relational  databases
created by many database management systems ("DBMS") on the market. In addition,
this proprietary  software tool has the ability to directly utilize  information
obtained from  spreadsheets  and data in the form of American  Standard Code for
Information  Interchange  ("ASCII")  files.  The  technology  has  been  further
improved  to  enable  it to  analyze  millions  of  records  and to act over the
Internet   without  the  need  to  first  download  the  data  being   analyzed.
Telecommunications  industry  specific  applications of the technology have also
been developed and are now being marketed.

     d.b.Express  does not replace  DBMS  programs.  Instead,  it  improves  the
accessibility  of  databases  created by DBMS by  eliminating  the need to write
queries in  computer  code and  facilitates  data  searches  through  the use of
graphical query tools.  Prior to the  availability  of  d.b.Express,  comparable
analytical  and  presentation  capabilities  were possible  only through  costly
executive  information  systems  ("EIS") or  customized  programs  developed and
supported by highly-skilled  MIS  professionals.  The need for MIS professionals
and programming effectively raises the cost of access to information in terms of
time and  money.  Ultimately,  these  barriers  result in less  timely and lower
quality business decision-making.

     There are some DBMS access tools on the market that claim to eliminate  the
need to use computer code and provide graphical query  capability.  All of these
programs,  however,  only simplify the writing of computer code, usually through
industry-standard  structured  query language  ("SQL"),  by having users develop
logic in a  semi-procedural  facility.  While reducing some problems  associated
with the writing of computer code, such as "typographical  errors",  they do not
eliminate  the need for  knowledge of computer  code or database  structure  and
organization,  and require significant training of the user. d.b.Express enables
the access and productive use of complex databases without computer  programming
or knowledge of SQL.

     d.b.Express approaches database accessibility uniquely,  enabling people at
all levels of an  organization  to analyze  the data  without any  knowledge  of
programming.  d.b.Express  achieves  this  in  two  steps.  First,  d.b.Express,
utilizing proprietary algorithms,  accesses and automatically  summarizes all of
the records in the required databases into its own format.  Second, the software
presents users with an intuitive multi-dimensional picture of the data which the
user can easily  customize to his need with a simple point and click  interface.
In  addition  to  a  vast   simplification  of  database  access  and  analysis,
d.b.Express  performs these tasks faster than any DBMS because the software does
not  reread the  database  for each task;  it only  reads the  summaries  it has
created.

     The advantages inherent to d.b.Express include the following:

     Ease of Use

     Using the  analogy of an  automatic  camera,  d.b.Express  simplifies  data
access and analysis by providing a sophisticated,  simple-to-use vehicle to take
pictures of complex  data. By combining an intuitive  point and click  interface
with  a  powerful  integration  and  retrieval  engine  in a  low-cost  product,
d.b.Express  breaks down the barriers between people and data. After d.b.Express
has  read  one or  more  databases,  the  data  is  presented  to the  user in a
"filescape"  using a common bar chart metaphor.  The user merely points to a bar
in the chart and  clicks to view  data  from the  highest  summary  level to the
lowest level of detail. d.b.Express provides powerful desktop functionality that
allows the exploration of data patterns, trends, and exceptions.  Data searches,
queries  and  analyses  can be  converted  to  sophisticated,  but simple to use
presentations   providing   integrated  business  graphics  and  report  writing
capabilities.

     Interfaces With Leading Databases and Other Tools

     d.b.Express  provides  direct access to leading  databases  created by DBMS
vendors,  including  CA-Clipper,  Microsoft  Access,  Foxbase and FoxPro,  Lotus
Approach,  Borland dBase and Paradox,  Oracle,  Informix,  Sybase,  Ingres,  SQL
Server, IBM DB2 and DB2/2, Netware SQL, Gupta SQL Base,  Progress,  XDB, SQL/DS,
Teradata and  Btrieve.  These DBMS's  represent  more than 85% of the  installed
relational  database  management  systems  ("RDBMS")  worldwide.   In  addition,
d.b.Express  is able to access data contained in  spreadsheets  and read data in
ASCII format which  further  broadens the software s capability  with other DBMS
products.  d.b.Express results can be exported to popular  spreadsheets,  report
writers,  graphics  packages and word processors  including Lotus 1-2-3,  Excel,
Quattro  Pro,  ReportSmith,  Crystal  Reports,  Harvard  Graphics,  Power Point,
WordPerfect and Word.

     Ability To Integrate Data From Databases Created By Multiple Vendors

     When  d.b.Express  reads  a  database  it  creates  its  own  summaries  of
information through its proprietary process.  Information contained in databases
is formatted into d.b.Express  proprietary  format. This permits users to access
and  compare  information  contained  in  enterprise-wide  databases  created by
different vendors simultaneously in the d.b.Express user-friendly environment.

     Works in Common Operating Environments

     d.b.Express   operates  in  virtually  all  file  server  and  peer-to-peer
networking  environments  providing data to Microsoft Windows and Windows NT and
DOS Intel-based  workstations.  Computer Concepts,  through technology synergies
afforded by  Softworks,  is  designing  extensions  to  d.b.Express  that can be
installed  on  mainframes.  The  ability  to operate  on  mainframes  would open
substantial new markets for the application of d.b.Express.

     High Processing Speed

     Once  a  database  has  been  read  by  d.b.Express,   d.b.Express  employs
proprietary matrix storage technology rather than rereading each data element in
that  database.  All packaged  DBMS reread every single data element each time a
task,  such as  sorting  or  analysis,  is  performed.  The  elimination  of the
rereading step through  d.b.Express  proprietary  process  vastly  increases the
speed of data access enabling ad hoc analysis at a rate far faster than possible
with any other  system.  The  advantage  of the  d.b.Express  process over other
processes increases with the size and complexity of the database.

     d.b.Express breaks down barriers between people and data by eliminating the
need for SQL  expertise,  saving time by gaining  decision-critical  information
through  rapid  data  access and  analysis,  and saving  money  through  minimal
training investment and cost-effective product implementation.

     Windows  Version 1.0 of d.b.Express was introduced in December 1993 and the
DOS version was introduced in late 1992. Windows Version 2.0, with significantly
enhanced  functionality  based on user  feedback,  was  introduced in the second
quarter of 1994 and Windows 95 Version was  introduced  in the third  quarter of
1995.  Windows NT, Internet Server and JAVA Applet versions have been introduced
in 1996 and 1997.
Disadvantages in regard to d.b.Express include the following:

     Lack of Established User-base and Acceptance of the Product

d.b.Express is not yet widely used in the computer  industry and is perceived as
a new  technology  which many  users may defer  usage of until the  product  has
established its use by large numbers of users. The Company believes its focus on
large  scale  users and its new  Internet  access  technology  will lead to such
usage,  however,  there is no assurance  that the Company will be  successful in
implementing sales and wide based usage of the product.

     Limited Resources to Market and Promote d.b.Express

The  Company  has  limited  cash  resources  with  which to market  and  promote
d.b.Express,  and regardless of the unique patented  aspects of the product,  if
the  Company  is not able to  effectively  market and  promote  the usage of the
product,  the successful  dispersion of the product as a widely used access tool
may not be achieved.

     Alternative Methods Available to Access Data and Potential New Technologies

d.b.Express' access method is patented and unique, however,  alternative methods
for accessing  data exist,  primarily text based search  engines,  which are not
able to access large quantities of data with the nearly instantaneous results of
d.b.Express  and/or without knowledge of specific database query languages.  The
Company  is not  aware of any  alternative  technology  which  can  effect  data
searches with the speed, and without  sophisticated  programming  skills,  which
d.b.Express  provides,  however,  it is possible that new  technologies  will be
developed  which  may  effectively   compete  with  d.b.Express.   If  such  new
technologies are developed,  they could negatively  impact the Company's ability
to successfully market and promote d.b.Express.

     The  Company is  currently  in  discussions  with  several of the  computer
software  industry s leading  companies.  On June 1, 1995, the Company announced
that it had signed an agreement  with Oracle whereby the Company is making a new
version of its d.b.Express software available to Oracle database users, enabling
them to make use of Computer  Concepts patented data  visualization  technology.
The Company also has entered into  development or license  agreements  with IBM,
Dell and Information Builders, and entered into a world-wide sales and marketing
agreement with Perot Systems of Dallas,  Texas, in December,  1995, however, the
Company  was  advised in the  second  quarter  of 1996 that Dell  Computers  had
discontinued  distribution of d.b.Express.  The Oracle and IBM agreements enable
the Company to provide  "tightly  integrated"  versions of d.b.Express to Oracle
and IBM "OS/2"  users,  effectively  making the  product's  usage  "seamless" or
"transparent"  to the user.  Although  this enables the Company to better market
d.b.Express  to the large numbers of Oracle and IBM OS/2 users,  and the Company
anticipates  that  sales  will  be  generated  as a  result  of  these  "tightly
integrated" versions, the agreements do not guarantee such sales.
 The Information Builders agreement provides for royalty payments to the Company
based on sales of its hardware and software  products which include  d.b.Express
software  technology.  The  Perot  Systems  agreement  provided  for  sales  and
marketing activities regarding the d.b.Express  technology whereby Perot Systems
was  to be  compensated  based  on  certain  sales  and  royalty  revenues  from
d.b.Express,  however, no minimum purchases or sales were required. Although the
Company  believes these  agreements  will produce  revenues,  until a history of
sales is  established,  there is no assurance  that any of the  agreements  will
produce  such  revenues,  and to date,  revenues  have been  insignificant.  The
Company  recently  announced  that  it has  signed  an  agreement  with a  major
telecommunications  company and anticipates  receipt of significant  d.b.Express
revenues  therefrom  in 1998,  however,  due to  contractual  restrictions,  the
Company is unable to presently  further discuss the terms of the agreement,  but
anticipates  that it will be able to  release  additional  details  in the  near
future.
Softworks' Systems Management Software Products

     Systems  management   software  products  provided  by  Softworks  optimize
mainframe  system  performance,  reduce  hardware  expenditures  and enhance the
reliability  and  availability  of the data  processing  environment.  Softworks
products enable  corporate data centers to extend the life of their current data
processing investments,  defer expensive hardware and software upgrades, prevent
downtime  caused by software  failures,  automate data recovery  processes,  and
thereby improve personnel productivity.  Softworks is recognized as an expert in
system performance  management,  and data and storage management,  and leverages
its expertise by  integrating it into products that are intuitive and proactive,
while  other  vendors  just  monitor and report.  Softworks'  products  increase
product value and achieve  market  differentiation  by providing the ability and
necessary  intelligence to establish  controlled  automation that is designed to
react and resolve. Softworks calls this differentiating characteristic Softworks
SavanTechnology,   which  increases  the  customers  ability  to  fully  exploit
technology investments without requiring additional manpower and expertise.

     Softworks  current systems  management  product  offerings include new Year
2000 products which address the assessment and testing  portion of the year 2000
problem,  as  well as HSM  Agent  and  TeraSAM,  Catalog  Solution,  Performance
Solution,  VSAM Assist,  Capacity Plus for VSAM, Space Recovery  Facility,  VSAM
Quick Index, and VSAM Space Manager.  During 1996, Softworks,  released enhanced
versions of all existing products except one, providing  increased  capabilities
and making all of the  products  year 2000  ready.  Softworks  is also  actively
developing  additional  Year 2000  relevant  products.  Softworks  products  are
divided into four arenas,  the Performance  Arena,  the DataStor Arena, the Year
2000 Arena and the fourth arena which is still under  research and  development,
the Communications Arena.

     The Performance  Arena family of products  comprise a set of solutions that
help derive  maximum  performance  from  enterprise  systems  and  applications.
Softworks  performance  products  approach the  performance  challenge  from the
application,  task, and system levels. The products address such key performance
issues as; dynamic I/O tuning;  dumping and restoring data;  extending operating
systems  capabilities;  performance  balancing,  and determining the performance
impact of changes to an environment.

     The DataStor  Arena,  addresses  system  availability  and data and storage
management  issues.  Softworks'  DataStor  Arena  solutions  are  recognized  as
solutions for addressing  system  availability  issues and effectively  managing
data both  logically  and  physically.  Softworks  has a history  of  aggressive
product  enhancement and  development as evidenced by its  introduction of three
major new products  during 1995 and 1996, and now the  introduction  of its Year
2000 products and the anticipated release of a suite of multi-platform  products
later in the second quarter of 1997. Of these new products,  TeraSAM facilitates
the  management  and  maintenance  of large  files,  and  relieves the file size
limitation for IBM's VSAM files. QuickTune, the second new product, provides the
ability to analyze program execution and identify system and program performance
bottlenecks, and CenterStage/MVS,  provides proactive storage management, and is
the first component of  CenterStage/MP,  the  multi-platform  storage management
suite of products.

     The Year 2000 suite of  products  include  HotDate  2000/Simulate,  HotDate
2000/Discovery  and HotDate  2000/Test  which address the critical  processes of
identifying,  diagnosing  and  simulating  the year 2000  issues  throughout  an
enterprises  environment.  The products'  capabilities include the simulation of
clock   transitions  on  critical   applications  and  provide  the  ability  to
simultaneously  simulate  the year 2000  date  change  and  analyze  its  impact
throughout the enterprise without impacting  production;  identification of date
oriented data and program code and their inter-relationships, and the ability to
identify  system date  processing in object code and during real time execution,
however,  there  can be no  assurances  whether  there  will be any  significant
revenues from the Year 2000 suite of products.
The mainframe market segments that Softworks products address are robust as
evidenced by the continuing increase industry-wide in the number of "MIPS" and a
significant  increase in Softworks' 1996 product licensing  revenues,  and these
market  segments  are  expected  to remain so for the  foreseeable  future.  The
multi-platform  and Year 2000 markets are also  anticipated  to grow through the
millennium.

     Other Product

     As a reseller,  the  Company  also  markets  "Perspective  for  Windows," a
three-dimensional graphics presentation product.

SALES AND MARKETING

     d.b.Express is currently being marketed to the telecommunications industry,
governmental entities,  financial services industry,  Fortune 1000 companies and
OEM  s  (producers  of  other  software   products   incorporating   d.b.Express
technology) in the United States.  The Company  utilizes a direct sales force as
well as an indirect  network of  distributors  and resellers for this market The
Company s direct sales force presently  consists of sales and support  personnel
operating from the Company's  headquarters  in Bohemia,  New York. The Company's
services  unit  provides a wide array of  information  technology,  support  and
services  which  offer  solutions,  support,  and  strategies  to solve  various
business needs in such areas as network determinations,  help desk applications,
wiring/cabling, LAN connections,  moves/adds/changes, and project management, as
well as overseeing new installations and offering on-site component repair.

     Softworks holds over 2,400 licenses for its products in over 1,800 customer
installations  worldwide.  The products are installed in approximately 80 of the
Fortune 100  Companies  data centers.  The Company  maintains  strategic  vendor
alliance  relationships with IBM,  Microsoft and Sybase.  These programs provide
Softworks  access to  pre-release  versions  of software in order to ensure that
Softworks  products  exploit the newest  technology  and are  compatible  to new
operating  systems and data base releases.  The programs also provide  Softworks
with insight for strategic planning and product direction.

     Softworks  markets its products and services to both the United  States and
Canada  through  its North  American  sales  staff and  offices  and a  Canadian
distributor.  Softworks  sales and  marketing  activities  targeting  the United
Kingdom,   Ireland,  and  the  Benelux  countries  emanate  from  the  Softworks
international  office in Harpenden,  U.K. During 1994 and early 1995,  Softworks
also opened new markets in Turkey,  Hong Kong, and South  America,  and recently
opened an office in France.  The Company markets to a host of other countries in
the  international  community through a network of distributors that service the
following countries: Italy, France, Germany, Switzerland,  Scandinavia,  Israel,
Japan, Australia/New Zealand, Singapore, Thailand, South Africa, and Brazil.

     Softworks generates almost half of its income by selling perpetual licenses
for the use of its  products.  Pricing  for  mainframe  products is based on the
computational capacity of the CPU s on which the software operates.  Pricing for
non-mainframe and cross-platform varies from enterprise-wide  agreements to "per
seat"  pricing.  The Company also  generates  revenue  through  maintenance  and
support agreements that are reviewed annually on the anniversary of the original
purchase date. In 1996 , approximately half of total Softworks revenue came from
recurring  maintenance  and  support  agreements.  The  renewal  rate for  these
contracts is over 95%. Other  revenues are generated  when product  licenses are
transferred to different/larger CPU s. No customer of Softworks comprised 10% or
more of the Company s 1996 consolidated revenues.

     In  accordance  with  industry  practice,  the Company s personal  computer
products  are  licensed  under  "shrink-wrap"  license  agreements  contained in
product packages in which the end-user  acknowledges  license term acceptance by
breaking  package  seals.  The Company s mainframe  products are licensed  under
site-specific license agreements.
Seasonality and Backlog

     The Company s quarterly  results  are subject to  fluctuations  from a wide
variety of factors  including,  but not limited  to, new product  introductions,
domestic   and   international    economic   conditions,    customer   budgetary
considerations,  the Company s sales  compensation  plan,  the timing of product
upgrades,  customers'  support  agreement  renewal cycles and fee recognition in
connection with exclusive distribution and other agreements.  As a result of the
foregoing  factors,  the  Company s  operating  results  for any quarter are not
necessarily indicative of results for any future period.

     The Company generally produces inventory shortly before anticipated product
shipment.  Accordingly,  the Company  has not  experienced  significant  product
backlog  nor  believes  that the  existence  of  product  backlog  is a relevant
indicator of future sales performance.

Manufacturing and Distribution

     The Company  currently  contracts the  manufacture  of software  diskettes,
product  documentation  and  packaging  for  its  d.b.Express  product  line  to
non-affiliated  third-party  manufacturers.  Due to the  existence  of  numerous
companies providing  manufacture of these items, the Company is not dependent on
any one contractor.

     Softworks produces its own tapes and is not dependent on any one contractor
for materials.

Competition

     The Company s products  are marketed in a highly  competitive  environment.
Such   environment  is   characterized   by  rapid  change,   frequent   product
introductions and declining prices. Further, the Company s PC products have been
designed  specifically  for use on the Intel X86 family of computers,  utilizing
other well known database products. No assurance can be given that the Company s
patents and copyrights will effectively  protect the Company from any copying or
emulation of the Company s products in the future.

     The Company  considers  certain  end-user  data  access tool and  executive
information  system  software  companies to be  competitors  to its  d.b.Express
product including Trinzic  Corporation,  Cognos,  Inc., Comshare Corp. and Pilot
Software,  Inc. The Company  believes that  d.b.Express can compete  effectively
against  such  companies  product  offerings  based  on  ease  of  use,  lack of
programming, data access speed and price.

     Softworks  products  compete with offerings from Boole & Babbage,  Computer
Associates  International  Inc., BMC, Compuware and Platinum  technologies.  The
products  compete  effectively  based on quality of support,  price, and product
quality.  Many of the  Company s  existing  and  potential  competitors  possess
substantially  greater  financial,  marketing and technology  resources than the
Company.

EMPLOYEES

     The  Company  had 203  employees  at  January 1, 1998,  including  85 in
marketing,  sales and  support  services,  88 in  technical  support  (including
research and development) and 30 in corporate  finance and  administration.  The
future  success of the  Company  will  depend in large  part upon its  continued
ability  to  attract  and  retain  highly   skilled  and  qualified   personnel.
Competition  for such  personnel  is intense,  and the  Company has  experienced
turnover in its  management  group.  The Company has  employment  contracts with
certain of its subsidiary  executive  officers.  None of the Company s employees
are represented by a labor union.  The Company  believes that its relations with
its employees are good.

PATENTS AND TRADEMARKS

     The Company has three federally registered trademarks: "CCC" , "d.b.Express
" and "dbACCEL" . In addition, the Company received a patent for the proprietary
aspects of its d.b.Express technology in 1994, and a second,  expanded patent on
that  technology in 1995,  which  broadened  the claims  regarding the product's
graphical  interface and indexing.  Softworks has received  copyrights for their
entire product line.

PROPERTIES

     The Company leases various  facilities for its Corporate  headquarters  and
subsidiary operations, as follows:
Description      Location        Square Footage      Lease term         Annual Rental
-----------      --------        --------------      ----------         -------------
                                                                             Cost
                                                                             ----
Corporate       Bohemia, NY         10,000          7/1/94 - 6/30/98     $144,000 (1)
Subsidiary      Alexandria, VA      25,000          9/1/94-8/31/2001     $318,000 (2)
(1) The primary lease for the Bohemia,  N.Y. facility was renegotiated  effected
January 1, 1996 to a base rent of $12,000 monthly.  Further,  the lease provides
for annual  increases of  approximately 4% and is renewable at the option of the
Company for an additional year term at the end of its initial term. In February,
1997,  the Company  negotiated an additional  two year  extension  (July 1, 1998
through June 30, 2000) to the term of the lease.  the extended  period calls for
base rents to increase to $12,600 per month throughout the term.

(2) Lease provides for annual  increases of 3% per year, and is renewable at the
option of the Company.
CHANGE IN ACCOUNTANTS

     On May 22, 1997, with the approval of the  Registrant's  Board of Directors
and  Audit  Committee,  the  Registrant  dismissed  Grant  Thornton  LLP  as its
independent accountants for the year ending December 31, 1997.

     Grant Thornton  LLP's reports on the financial  statements for the past two
fiscal years  contained no adverse opinion or disclaimer of opinion and were not
qualified or modified as to uncertainty,  audit scope or accounting  principles,
other than to include in their report for the Company's financial  statements as
of and for the year ended  December  31, 1996,  the  following  statement:  "The
accompanying  consolidated financial statements have been prepared assuming that
the Company  will  continue  as a going  concern.  As shown in the  consolidated
financial  statements,  the Company continued to sustain  significant losses and
use substantial amounts of cash in operations during the year ended December 31,
1996.  These factors,  among others,  as discussed in Note 1 to the consolidated
financial  statements,  raise  substantial  doubt about the Company's ability to
continue as a going concern.  Management's  plans in regard to these matters are
also  described  in  Note  1.  the  financial  statements  do  not  include  any
adjustments that might result from the outcome of this uncertainty."

     During the two most recent fiscal  (calendar) years and through the date of
dismissal (May 22, 1997) there were no disagreements  with Grant Thornton LLP on
any matters of accounting principle or practice,  financial statement disclosure
or auditing scope or procedure, which disagreement(s),  if not resolved to Grant
Thornton  LLP's  satisfaction,  would have  caused  Grant  Thornton  LLP to make
reference to the subject matter of the  disagreement(s)  in connection  with its
reports on the Registrant's financial statements.

     The  response  letter  from  Grant  Thornton  LLP  required  by Item 304 of
Regulation S-K was filed as an exhibit on Form 8-K and is hereby incorporated by
reference.

     On June 2, 1997, with the approval of the  Registrant's  Board of Directors
and Audit Committee,  the Registrant  retained Hays & Company  (internationally,
Hays  Allan  Affiliates)  as its  independent  accountants  for the year  ending
December 31, 1997.

LEGAL PROCEEDINGS

     During May 1994,  the Company and certain  officers  received  notification
that they had been named as defendants in a class action claim [Nicholas  Cosmas
v Computer Concepts Corp., et al; United States District Court, Eastern District
of New York]  alleging  violations  of certain  securities  laws with respect to
disclosures  made regarding the Company s acquisition of Softworks,  Inc. during
1993. Class  certification  was granted on February 6, 1995. The Company and its
officers  have  answered  the  complaint in the action,  denying all  wrongdoing
whatsoever  alleged,  and continue to deny all alleged  wrongdoing,  however, to
avoid further substantial  expense,  risk,  inconvenience and the distraction of
the litigation,  and to put to rest all  controversies  raised in the action,  a
settlement  of the matter was  approved by the court  resulting  in payment of a
settlement fund of shares of common stock of the Company with a minimum value of
$2,000,000  plus a cash  payment  of  $75,000  for the  benefit of the class and
payment of Plaintiff's  counsel's legal fees as approved by the court out of the
settlement fund. The Company posted a charge to earnings in the first quarter of
1996 of  $2,075,000  to reflect  this  settlement  consisting  of  $75,000  plus
2,614,000 shares of the Company's Common Stock.

     In September 1994, the Company received notice of an action alleging breach
of contract regarding an acquisition  transaction initiated during 1993. In July
1995, a settlement  agreement,  effective June 30, 1995, was reached whereby the
Company was  required to pay $75,000 and agreed to an  amendment of the original
contract  to  secure  additional  software  license  rights.  Pursuant  to  such
amendment,  the Company issued a  non-interest  bearing  promissory  note in the
amount of $388,800 payable in 36 monthly installments due September 1, 1998, and
has made timely payments thereon, which amount was recorded as an unusual charge
in the 1995 Consolidated Statement of Operations.
In March 1995, an action  (Barbara  Merkens v Aval Guarantee  Ltd.,  Walter
Mennel, J. Forror,  A.  Faehndrich-Baun,  T & M Consulting AG, M. Schmidt,  E.G.
Baltruschat and Computer Concepts Corp.;  United States District Court,  Eastern
District of New York) was originally  commenced against the Company and a number
of  defendants  all of whom are  unrelated  to the Company,  alleging  fraud and
conversion  claims  in  regard  to those  defendants  unrelated  to the  Company
regarding a  transaction  wherein the  defendants  unrelated  to the Company are
alleged to have transferred  certificates  representing 10,000,000 shares of the
Company's common stock.  The certificates had not been legally acquired from the
Company and the  certificates  were  reported  to the  Securities  and  Exchange
Commission by the Company as stolen certificates.  In early 1997, after a change
in counsel, the plaintiff amended the complaint for a second time, now naming as
defendants  only the  Company  and three of its  officers.  The  second  amended
complaint  alleges  that  certain  third  parties,  unrelated  to  the  Company,
transferred certificates  representing 10,000,000 shares of the Company's common
stock to the  plaintiff.  The  complaint  further  alleges that such shares were
endorsed in blank by the third parties and became bearer  securities  which were
negotiated to the plaintiff by physical delivery.  Plaintiff requests validation
of the transfer of the  certificates  and is seeking  damages of an  unspecified
amount,  consisting of alleged  diminution in market value of the subject shares
from 1994 through the date of any judgment in the plaintiff's favor. The Company
and its officers  believe that the  Company's  position  regarding the claim has
substantial factual and legal support and are vigorously defending the matter.

     In July 1995, a class action (Emmanuel Aryeh v. Computer  Concepts Corp. et
al) was commenced  against the Company and certain of its officers and directors
in the United  States  District  Court,  Eastern  District of New York.  In this
complaint,  the plaintiff alleges  violations of Section 10(b) of the Securities
and Exchange  Act and Rule 10b-5  promulgated  thereunder,  arising from certain
alleged  misrepresentations  and  misstatements by officers of the Company which
occurred  in or  about  June  1995.  On  August  15,  1995  an  action  alleging
substantially  the same claims (Zev Nadler v. Computer Concepts Corp. et al) was
commenced  in the same court and three more  identical  or similar  actions were
also  commenced  in  the  Eastern  District.   The  five  complaints  have  been
consolidated into one action. The matter has been settled pending final approval
by the court,  and if  approved,  the company will deliver and place into escrow
1,000,000  shares of its common stock. In the event that the average closing bid
of the Company's  common stock for the ten trading days prior to the  settlement
hearing is less than $.50 per share, the Company will issue  additional  shares,
determined by dividing  $500,000 by the ten day average less the shares  already
placed into escrow.  Further,  the Company and its  insurance  carrier will each
deposit into escrow  $350,000,  totaling  $700,000.  Based upon the  Stipulation
Agreement,  the Company had  recorded in the  quarter  ended June 30,  1997,  an
$850,000 Unusual Charge to earnings.

     In late November,  1995,  Fletcher  Capital Corp. filed a claim against the
Company,  Daniel DelGiorno and several unrelated parties (Fletcher Capital Corp.
v Computer  Concepts  Corp.,  et al) in Superior  Court for Camden  County,  New
Jersey,  regarding a claim for an unspecified  amount of commissions in the form
of options  from the  Company and cash from the other  parties.  This matter was
settled with the issuance of 360,000  options  exercisable at $.35 per share and
$126,000 paid with 252,000 shares of common stock and payments totaling $31,000.

     On June 11,  1996,  the  Company  received  notice  of  entry of a  default
judgment  against  it for  $1,500,000  and  specific  performance  to effect the
registration  of common stock held by Merit  Technology,  Inc. in a matter which
the Company had not been served or received notice of (In Re: Merit  Technology,
Inc.,  Debtor,  U.S.  Bankruptcy Court,  Eastern District of Texas). The Company
timely  filed a motion to set aside the  default  judgment  based on the lack of
service and meritorious  defenses. On August 13, 1996, the default was set aside
by the court and  during  December,  1996,  this  matter  was  settled  with the
issuance of 100,000 shares of common stock.

     During  March,  1997,  the Company  received a Complaint  filed in the U.S.
District Court for the Western District of Texas, by Dell Computer  Corporation.
A Second Amended Complaint alleges that the Company failed to deliver product as
contract  for and  further  alleges  damages  in  excess of  $850,000.  Based on
consultation  with legal  counsel,  the Company and its  officers  believe  that
meritorious  defenses  exist  regarding  the  claims  and  they  are  vigorously
defending against the allegations. The Company is unable to predict the ultimate
outcome of this claim,  which could have an adverse  impact on the  consolidated
financial position and results of operations of the Company, and accordingly, no
adjustment has been made for any potential loss.
MANAGEMENT

Directors and Executive Officers

     As of January 16, 1998, the names, ages and positions of the directors and
executive officers of the Company are as follows:
Name             Age                       Position
        ----             ---                       --------
Daniel Del Giorno, Sr.   65             Chairman, Ass't. Sec. and Director

Daniel Del Giorno, Jr.   42             President, CEO, Treasurer, Director

Russell Pellicano        56             Secretary, Director

Jack S. Beige            52             Director

Augustin Medina          56             Director

Edward Warman            53             Exec. V. P.  of Products and Services

George Aronson           47             Chief Financial Officer
Daniel Del  Giorno,  Sr. has been  Chairman,  Chief  Executive  Officer (to
October,  1997),  Assistant  Secretary and a director of the Company since April
1989, and is the father of Daniel Del Giorno,  Jr., the Company's  President and
also a  director.  During the period 1987 to April  1989,  Mr. Del  Giorno,  Sr.
together  with Mr.  Pellicano  (director  of the  Company)  was  engaged  in the
research and development of d.b.Express.  Prior thereto,  during the period 1985
to May 1987,  Mr. Del Giorno,  Sr. was the Chief  Executive  Officer of Myotech,
Inc.  ("Myotech"),  a privately held  corporation  which  produced  computerized
muscle testing equipment for chiropractors and physical therapists.  Myotech was
sold to  Hemodynamics,  Inc. in May 1987 and later became a public  corporation.
Mr. Del Giorno, Sr. was a practicing chiropractor for many years and had founded
a chiropractic clinic employing 4 chiropractors and 6 technicians in addition to
administrative  personnel. He also successfully  collaborated with Mr. Pellicano
in  connection  with  the  design  and  development  of  medical  equipment  for
comparative  muscle testing.  A patent has been granted to Mr. Pellicano and Mr.
Del Giorno, Sr. in connection therewith. In addition, Mr. Del Giorno, Sr. is the
holder  of a patent  for a  digital  myograph  for the  testing  of  muscles  by
computer.  Mr. Del Giorno,  Sr. is also an officer,  director and shareholder of
Tech Marketing  Group Corp.  which is a holding company and a shareholder of the
Company.  See "Security  Ownership of Certain  Beneficial Owners and Management"
and "Certain Transactions".

     Daniel Del Giorno, Jr., the Company's  President,  CEO, and a director,  is
the son of Daniel Del  Giorno,  Sr. and has been with the  Company  since  April
1989.  Prior to joining  the  Company and during the period 1987 to 1989 Mr. Del
Giorno,  Jr. was involved in providing the management and financial  support for
and collaborated  with Mr. Del Giorno,  Sr. and Russell  Pellicano in connection
with the development of d.b.Express.  During the period 1984 to May 1987, he was
the President of Myotech,  a privately  held Company  producing  muscle  testing
equipment.  He is also the President,  a director and principal shareholder with
Daniel  Del  Giorno,  Sr.  of Tech  Marketing  Group  Corp.,  a  privately  held
corporation  which is a shareholder of the Company.  See "Security  Ownership of
Certain Beneficial Owners and Management" and "Certain Transactions".

     Russell  Pellicano is a director and  Secretary of the Company since April,
1989 and served as Vice  President,  Secretary  and  Director  since  April 1989
through  February 1994. Mr.  Pellicano was the original founder and principal of
RAMP  Associates  Inc.  ("RAMP"),  which was  acquired by the Company in October
1990,  through  which he has engaged in  consulting  to major  corporations  and
others for the design of software and hardware for  computers.  A major customer
of RAMP since its inception has been Grumman Corporation. Mr. Pellicano, through
RAMP, has been  consulting for Grumman and other  corporations.  He is the chief
architect  and designer of  d.b.Express  and has been  involved in designing and
developing  computer  software and  hardware  for the past 30 years.  Among many
noteworthy  projects for which he was  responsible at Grumman was the design and
installation  of  the  Orbiting  Astronomical  Observatory  Space  Craft  Ground
Station,  and he was a member of the launch team at Cape Kennedy in  conjunction
therewith. He was also Senior Systems Analyst for Grumman in connection with the
test  instrumentation  for the forward  sweep wing (X29)  experimental  aircraft
on-board computer system,  and the F-14D and the A-6E production  aircraft.  Mr.
Pellicano  is a  graduate  of C. W.  Post  College  in  1973  with a  degree  in
Electrical Engineering.

     Jack S. Beige, D.C., J. D., was appointed a director in November, 1995, for
a term  beginning  January,  1996,  and was  appointed  as a member of the Audit
Committee and the Compensation Committee, also effective January, 1996.
 Mr. Beige  received  his Juris Doctor  degree in 1993 and has been a practicing
attorney, primarily in business related matters, on Long Island, New York, since
then. Prior thereto, Mr. Beige practiced chiropractic medicine, was President of
BSJ Realty Corporation,  President of All Travel, Ltd. and was President of Comp
Consulting,  Inc. During his practice as a chiropractic doctor, he was elected a
Fellow of the International College of Chiropractors,  was appointed as Chairman
of the  New  York  State  Worker's  Compensation  Board,  Chiropractic  Practice
Committee  and  was  elected  President  of  the  New  York  State  Chiropractic
Association  in 1987.  Mr.  Beige is admitted to the New York State Bar and is a
member of the New York State Bar Association,  the Nassau and Suffolk County Bar
Associations and is a member of the American Arbitration Association.

     Augustin  Medina was  appointed a director in  November,  1995,  for a term
beginning  January,  1996, and was appointed as a member of the Audit  Committee
and the Compensation  Committee,  also effective January,  1996. During the last
five years and  previously,  Mr. Medina has been an independent  business broker
associated with the Montecristi  Corporation,  Gallagher Associates and Anderson
Credit and Leasing,  on Long Island, New York. Mr. Medina's business  background
includes advising and assisting  businesses in computer and non-computer related
businesses in their development and structuring of sales and marketing programs.

     Edward  Warman  joined the Company in September  1993 as Vice  President of
Products and Services.  From 1989 to 1993, he served as Vice President,  Product
Development  for  Comdisco  Disaster  Recovery  Services,   Inc.  where  he  was
responsible for the design and  implementation of a new product line of disaster
recovery software.  From 1984 to 1989, Mr. Warman was Vice President of Research
and  Development  at  Intersolv,   Inc.,  with  responsibility  for  a  software
development  staff  exceeding  100 people.  Prior to 1984,  he served in various
software  development  management  positions at  organizations  including Cincom
Systems, Inc., Computer Resources, and Monsanto. Mr. Warman possesses degrees in
systems analysis, economics and chemical engineering.

     George Aronson,  CPA, has been the Chief  Financial  Officer of the Company
since August,  1995. From March 1989 to August, 1995, he was the Chief Financial
Officer  of Hayim & Co.,  an  importer/distribution  organization.  Mr.  Aronson
graduated  from  Long  Island  University  with a major  in  accounting  in 1972
receiving a Bachelor of Science degree and is a Certified Public Accountant.

Executive Compensation

     The following table sets forth the annual and long-term  compensation  with
respect  to the  Chairman  and  Chief  Executive  Officer  and each of the other
executive  officers of the Company who earned more than  $100,000  for  services
rendered for the years ended December 31, 1996, 1995 and 1994. Directors are not
compensated  for their  services,  however,  the  outside  directors  received a
formula grant of stock pursuant to the 1995 Outside Directors Stock Plan.
Summary Compensation Table
Annual Compensation                          Long-Term Compensation
                             -----------------------------      --------------------------------------------------
                                                                                             Securities      All
                                                                Other        Restricted      Underlying     Other
Name and                     Fiscal                             Annual      Stock Option      Options/      Compen-
Principal Position            Year       Salary   Bonus(4)      Compensation   Awards            SARS       sation
-------------------------------------------------------------------------------------------------------------------
Daniel DelGiorno,Sr.,(1)(4)  1996      $259,000 $ 232,000     $     -             -               -           -
Director, Chairman           1995       240,000    84,000           -        1,280,000       1,280,000        -
Ass't Secretary              1994          -         -              -             -               -           -

Daniel DelGiorno, Jr.(1)(4)  1996          -      232,000           -             -               -           -
President, CEO, Treasurer    1995          -       84,000           -        1,280,000       1,280,000        -
Director                     1994          -         -              -             -               -           -

Russell Pellicano(1)         1996      195,000       -              -             -               -           -
Secretary                    1995          -         -              -          100,000         100,000        -
Director                     1994          -         -              -             -               -           -

Ed Warman (2)(4)             1996      116,000     53,000           -             -               -           -
Vice President of Products   1995      117,000       -              -          200,000         200,000        -
& Services                   1994      105,000       -              -             -               -           -

George Aronson (3)(4)        1996      144,000    187,000           -             -               -           -
Chief Financial Officer      1995       31,000       -              -           25,000         25,000         -

All Officers as a Group      1996     $714,000   $704,000           -             -               -           -
                             1995      388,000    168,000           -        2,885,000       2,885,000        -
                             1994      105,000       -              -             -               -           -
-----------
Footnotes

(1) Stock options had an original exercise price of $2.56 per share,  their fair
market value at date of grant, and were repriced to reflect an exercise price of
$.50 per share  effective May 1995. D. Del Giorno,  Sr., and D.  DelGiorno,  Jr.
were each granted an aggregate  of 300,000  shares of stock and 180,000  options
exercisable  at $.50,  and  600,000  options  exercisable  at $1.50,  in May and
November 1995, and 750,000  shares in November,  1996,  600,000 of which options
were  repriced to $.01 in 1997,  and R.  Pellicano was granted  100,000  options
exercisable at $1.50 in November,  1995. (2) Mr. Warman was granted the right to
200,000  options in 1995  exercisable  at $1.50 and 200,000  shares in November,
1996. (3) Mr. Aronson joined the Company in September,  1995 as Chief  Financial
Officer. (4) Bonus amounts reflected above for the year ended December 31, 1996,
are in the form of the  Company's  common stock,  subject to forfeiture  and /or
restrictions,  except for shares  valued at $172,000  and $28,000  issued to Dan
DelGiorno, Sr and George Aronson, respectively.
Option/SAR Grants in Last Fiscal Year

     No options or SARs were granted to Named Officers in 1996

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option Value

    The  following  table set forth  certain  information  with respect to stock
option  exercises by the named  Executive  Officers during the fiscal year ended
December 31, 1996, and the value of  unexercised  options held by them at fiscal
year-end.
Number of                            Value of
                                                                  Unexercised                         Unexercised
                                                                  Options at                         In-the-Money
                                                                  Fiscal Year                         Options at
                                                                    End(#)                         Fiscal Year End ($)(1)
                                                             -----------------------            -------------------------
                      Shares Acquired      Value
  Name                 on Exercise (#)   Realized ($)     Exercisable     Unexercisable       Exercisable   Unexercisable
  ----                ----------------   ------------     -----------     -------------       -----------   -------------
Daniel Del Giorno, Sr.       -                 -          1,280,000               -              42,500               -
Daniel Del Giorno, Jr.       -                 -          1,280,000               -              42,500               -
Russell Pellicano            -                 -            100,000               -                 -                 -
Ed Warman                    -                 -            240,000               -                 -                 -
George Aronson               -                 -             25,000               -                 -                 -
Footnotes

(1)  Market  Value of the  underlying  securities  at fiscal  year end minus the
exercise price.
Personal Liability and Indemnification of Directors

      The Company's  Certificate of Incorporation and Bylaws contain  provisions
which reduce the potential  personal liability of directors for certain monetary
damages and provide for indemnity of directors and other persons.

      Such  indemnification  provisions  are intended to increase the protection
provided  directors  and,  thus,  increase the Company's  ability to attract and
retain  qualified  persons to serve as directors.  The Company believes that the
substantial increase in the number of lawsuits being threatened or filed against
corporations  and their  directors and the general  unavailability  of directors
liability insurance to provide protection against the increased risk of personal
liability  resulting  from such  lawsuits  have  combined to result in a growing
reluctance  on the part of  capable  persons  to serve as  members  of boards of
directors of public companies. The Company also believes that the increased risk
of personal liability without adequate  insurance or other indemnity  protection
for its directors could result in overcautious and less effective  direction and
management  of  the  Company.  Although  no  directors  have  resigned  or  have
threatened  to resign as a result of the  Company's  failure to provide  greater
insurance  protection  or  other  indemnity  protection  from  liability,  it is
uncertain  whether  the  Company's  directors  would  continue  to serve in such
capacities if improved protection from liability is not provided.

      The provisions  affecting  personal liability do not abrogate a director's
fiduciary  duty to the  Company and its  shareholders,  but  eliminate  personal
liability for monetary  damages for breach of that duty.  The provisions do not,
however,  eliminate  or limit the  liability of a director for failing to act in
good faith, for engaging in intentional misconduct or knowingly violating a law,
for authorizing  the illegal  payment of a dividend or repurchase of stock,  for
obtaining an improper  personal  benefit,  for  breaching a  director's  duty of
loyalty  (which  is  generally  described  as  the  duty  not to  engage  in any
transaction  which  involves a conflict  between the interest of the Company and
those of the director) or for  violations of the federal  securities  laws.  The
provisions  also limit or indemnify  against  liability  resulting  from grossly
negligent  decisions  including grossly negligent business decisions relating to
attempts to change control of the Company.

      The provisions  regarding  indemnification  provide, in essence,  that the
Company will  indemnify  its directors  against  expenses  (including  attorneys
fees),  judgments,  fines and amounts paid in settlement actually and reasonably
incurred in connection  with any action,  suit or proceeding  arising out of the
director's status as a director of the Company,  including actions brought by or
on behalf of the Company (shareholder derivative actions). The provisions do not
require a showing of good faith. Moreover,  they do not provide  indemnification
for liability  arising out of willful  misconduct,  fraud,  or  dishonesty,  for
"short-swing"  profits  violations under the federal securities laws, or for the
receipt  of  illegal   remuneration.   The   provisions   also  do  not  provide
indemnification  for any  liability  to the extent such  liability is covered by
insurance.  One purpose of the provisions is to supplement the coverage provided
by such insurance.
The  provisions  diminish  the  potential  rights  of action  which  might
otherwise be available to shareholders by limiting the liability of officers and
directors to the maximum  extent  allowable  under Delaware law and by affording
indemnification  against most damages and settlement  amounts paid by a director
of the Company in connection with any shareholders  derivative action.  However,
the  provisions do not have the effect of limiting the right of a shareholder to
enjoin a director  from taking  actions in breach of his  fiduciary  duty, or to
cause the  Company to rescind  actions  already  taken,  although as a practical
matter courts may be unwilling to grant such equitable remedies in circumstances
in which such actions have already been taken.  If the Company is forced to bear
the costs for  indemnification,  the value of the Company stock may be adversely
affected.   In  the  opinion  of  the   securities   and  Exchange   Commission,
indemnification  for  liabilities  arising under the  Securities  Act of 1933 is
contrary to public policy and, therefore, is unenforceable.

                              CERTAIN TRANSACTIONS

     The Company  has,  from time to time,  borrowed  from or advanced  funds to
Messrs. Dan DelGiorno,  Sr. and Daniel DelGiorno,  Jr. At December 31, 1996, the
loan balance due from these  officers  was  approximately  $682,000.  Effective,
January,  1997, these advances are interest bearing at the rate of 7% per annum.
See Executive  Compensation and Security  Ownership of Certain Beneficial Owners
and Management regarding grants of stock and options to Directors and Officers.

     During  the fourth  quarter of 1996,  the  Company  advanced  approximately
$126,000 to Russell Pellicano. The advance was settled with the Company prior to
year end December 31, 1996, through the transfer of marketable securities to the
Company with a market value of $126,000.

     During the years  ended  December  31, 1996 and 1995,  the Company  paid an
outside  Director,  fees for legal  services  aggregating  $127,000 and $64,000,
respectively.

     During the years  ended  December  31, 1996 and 1995,  the Company  paid an
outside Director consulting fees of $52,000 and $30,000, respectively.

         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth certain information as of January 16, 1998,
with respect to the  beneficial  ownership of the Company's  Common Stock by all
persons known by the Company to be the beneficial  owners of more than 5% of its
outstanding  shares of Common  Stock,  by directors who own Common Stock and all
officers and directors as a group:
Common Stock        % of Outstanding
Name of Beneficial Owner                  Beneficially Owned       Shares (2)
------------------------                   -------------------    ---------------
Daniel Del Giorno, Sr. (1)(3)(4)             4,155,048                2.83%
Daniel Del Giorno, Jr. (1)(3)(4)(7)          2,755,048                1.88%
Russell Pellicano (1)(5)                       681,000                  *
Jack S. Beige (1) (3)                          419,444                  *
Augustin Medina (1)                            247,635                  *
George Aronson (1)                           1,000,000                  *
Ed Warman(1)(6)                              1,515,000                1.03%
-------
* Less than 1%
Footnotes (1) The address of the holder is 80 Orville Drive, Suite 200, Bohemia,
New York 11716. (2) Based upon 146,793,505 shares deemed  outstanding  (includes
outstanding  options owned by above named  parties) as of January 16, 1998. (3)
Includes shares held by his spouse. (4) Includes 680,000 options (exercisable at
$0.50 per share),  and  600,000  options  (exercisable  at $.01).  (5)  Includes
100,000 options  (exercisable at $1.50 per share)., (6) Includes 200,000 options
(exercisable  at $1.50 per share) and 80,000  options  (exercisable  at $.50 per
share; 60,000 of which are vested and 20,000 to vest ratably over one year). (7)
Daniel Del Giorno,  Jr. has majority  control of Tech Marketing Group which owns
174,048 shares.
SELLING SECURITY HOLDERS

      The  registration  statement of which this Prospectus  forms a part covers
the registration of 11,747,318 shares of Common Stock (the "Shares").

      These Shares are being offered by the following persons in the amounts set
forth below.
Common Stock    Common     Common Stk.   Option or    Amt owned      % of outstdg.
                                     Beneficially    Stock    to be offered    Warrant    if all shares    Common Stk
                                        Owned        To Be    upon exercise    Exercise      offered     to be owned if
                                      Prior to      Offered     of options      Price         hereby       all shares
                                      Offering*      Hereby    or warrants                   are sold      offered are      
                                                                                                            sold  (1)
                                     ------------   -------   -------------    --------    ------------   ------------
Bonefede, Michael                       25,000       25,000                                          0      0.00%
Dominion Capital Fund Ltd.           2,481,159    2,481,159                                          0      0.00%
Dominion Capital Fund Ltd.(2)(3)     1,500,000    1,500,000                                          0      0.00%
Dunnigan, Kevin                        220,000                      220,000     $.38/$.25            0      0.00%
Endeavor Capital Fund (2)(3)           500,000      500,000                                          0      0.00%
Innovative Capital, Inc.               200,000                      200,000          $.50            0      0.00%
Markus, Joseph                         915,000       40,000                                    875,000      0.60%
Nicolaou, Tim                          150,000      150,000                                          0      0.00%
Sovereign Partners LP                4,404,236    2,481,159                                  1,923,077      1.31%
Sovereign Partners LP(2)(3)          2,750,000    2,750,000                                          0      0.00%
Thomas Kernaghan(2)(3)               1,250,000    1,250,000                                          0      0.00%
Warman, Edward*                      1,515,000      150,000                                  1,365,000      0.93%
                                                             
                                    15,910,395   11,327,318         420,000                  4,163,077      2.84%
* Includes shares issuable upon exercise of options/warrants

(1) Based on 146,793,505 shares deemed outstanding if all options/warrants being
registered are earned and are exercised.
(2) Includes with others an aggregate of 6,000,000 shares,  all, some or none of
which may become  issuable  pursuant  to  guarantees;  if not so issued,  excess
shares listed herein will be returned to authorized, but unissued status.
(3) In the event additional shares become issuable,  a reverse stock split or an
increase  in the  authorized  capital  will be  necessary  to make  such  shares
available for issuance.  The Company received shareholder  authorization to take
such action at the November 26, 1997 shareholders' meeting.
The  securities  offered  hereby may be sold from time to time directly by
the Selling Security  holders.  Alternatively,  the Selling Security holders may
from time to time offer such securities through  broker-dealers acting as agents
for the Selling  Security  holders or to  broker-dealers  who may  purchase  the
Selling  Security  holders  securities as principals  and  thereafter  sell such
securities  from  time to time in the  over-the-counter  market,  in  negotiated
transactions,  or  otherwise.  The  distribution  of  securities  by the Selling
Security holders may be effected in one or more transactions  (which may include
block  transactions by or from the account of the Selling Security holders) that
may take  place on the  over-the-counter  market,  including  ordinary  broker's
transactions,  privately-negotiated transactions, through the writing of options
on the  Selling  Security  holders  securities,  through  sales  to one or  more
broker-dealers for resale of such shares as principals, through a combination of
such methods of sale or otherwise,  at fixed prices, at market prices prevailing
at the time of sale, at prices  related to such  prevailing  market prices or at
negotiated prices. Usual and customary or specifically negotiated brokerage fees
or commissions  may be paid by the Selling  Security  holders in connection with
such sales of  securities.  The  Selling  Security  holders  and  intermediaries
through whom such  securities are sold may be deemed  "underwriters"  within the
meaning  of the Act with  respect to the  securities  offered,  and any  profits
realized or commissions  received might be deemed to be  underwriting  discounts
and  commissions  under  the  Act.  If  the  Selling  Securityholder  sells  its
securities,  or options thereon, pursuant to this Prospectus at a fixed price or
at a negotiated price which is, in either case, other than the prevailing market
price or in a block  transaction  to a purchaser who resells,  or if the Selling
Securityholder pays compensation to a broker-dealer that is other than the usual
and  customary  discounts,  concessions  or  commissions,  or if  there  are any
arrangements  either  individually  or in the aggregate that would  constitute a
distribution of the securities,  a post-effective  amendment to the Registration
Statement of which this Prospectus is a part would need to be filed and declared
effective  by the SEC before such Selling  Securityholder  could make such sale,
pay such compensation or make such a distribution.

      At the time a particular  offer of securities is made by or on behalf of a
Selling Securityholder, to the extent required, a Prospectus will be distributed
which will set forth the  number of shares  being  offered  and the terms of the
offering, including the name or names of any underwriters, dealers or agents, if
any, the purchase price paid by any  underwriter  for shares  purchased from the
Selling Security holders and any discounts,  commissions or concessions  allowed
or reallowed or paid to dealers, and the proposed selling price to the public.

      Under the Securities  Exchange Act of 1934, as amended  ("Exchange  Act"),
and the  regulations  thereunder,  any person engaged in a  distribution  of the
securities  of the Company  offered by this  Prospectus  may not  simultaneously
engage in  market-making  activities  with  respect  to such  securities  of the
Company  during the  applicable  "cooling  off" period  (nine days) prior to the
commencement  of such  distribution.  In  addition,  and  without  limiting  the
foregoing, the Selling Security holders will be subject to applicable provisions
of the Exchange Act and the rules and regulations thereunder,  including without
limitation,  rules 10b-2,  10b-6 and 10b-7, in connection  with  transactions in
such securities, which provisions may limit the timing of purchases and sales of
such securities by the Selling Security holders.

      Sales of securities by the Selling  Security holders or even the potential
of such sales would  likely have an adverse  effect on the market  prices of the
securities  offered  hereby.  As of the date of this  Prospectus,  including the
securities  registered  in this  Registration  Statement  and  the  registration
statements  filed in  regard  to shares or  shares  issuable  upon  exercise  of
options,  and if all such  options and warrants  are  ultimately  earned and are
exercised,  the freely tradeable  securities of the Company (the "public float")
will be approximately 146,793,505 shares of Common Stock.
PLAN OF DISTRIBUTION

      The  securities  offered  hereby may be sold from time to time directly by
the Selling Security  holders.  Alternatively,  the Selling Security holders may
from time to time offer such securities through underwriters, dealers or agents.
The  distribution of securities by the Selling  Security holders may be effected
in one or more transactions that may take place in the over-the-counter  market,
including ordinary broker's transactions,  privately-negotiated  transactions or
through  sales  to one or more  broker-dealers  for  resale  of such  shares  as
principals,  including the Underwriter,  at market prices prevailing at the time
of sale,  at prices  related to such  prevailing  market prices or at negotiated
prices.  Usual  and  customary  or  specifically  negotiated  brokerage  fees or
commissions  maybe paid by the Selling  Security holders in connection with such
sales of securities.  The Selling  Security holders and  intermediaries  through
whom such securities are sold may be deemed "underwriters" within the meaning of
the  Securities  Act with  respect to the  securities  offered,  and any profits
realized or commissions received may be deemed underwriting compensation.

      At the time a particular  offer of securities is made by or on behalf of a
Selling Securityholder, to the extent required, a Prospectus will be distributed
which  will set forth the  number of shares  being  offered  and the term of the
offering, including the name or names of any underwriters, dealers of agents, if
any, the purchase price paid by any  underwriter  for shares  purchased from the
Selling Securityholder and any discounts,  commissions or concessions allowed or
reallowed or paid to dealers, and the proposed selling price to the public.

      Under the Securities  Exchange Act of 1934, as amended  ("Exchange  Act"),
and the  regulations  thereunder,  any person engaged in a  distribution  of the
securities  of the Company  offered by this  Prospectus  may not  simultaneously
engage in  market-making  activities  with  respect  to such  securities  of the
Company  during the  applicable  "cooling  off" period  (nine days) prior to the
commencement  of such  distribution.  In  addition,  and  without  limiting  the
foregoing, the Selling Security holders will be subject to applicable provisions
of the Exchange Act and the rules and regulations thereunder,  including without
limitation,  Rule 10b-6 and  10b-7,  in  connection  with  transactions  in such
securities, which provisions may limit the timing of purchases and sales of such
securities by the Selling Security holders.

                         SHARES ELIGIBLE FOR FUTURE SALE

     As of January 16, 1998, the Company had 133,629,276  shares of Common Stock
outstanding.  Of these shares approximately 109,000,000 shares are in the public
float. The 11,747,318  shares (including those issuable upon exercise of options
or warrants as discussed above) offered for sale in this Prospectus also will be
freely  tradeable  without   restriction  or  further   registration  under  the
Securities Act of 1933, except for any shares purchased by an "affiliate" of the
Company (in general,  a person who has a control  relationship with the Company)
which  will be  subject to certain  limitations  of Rule 144  adopted  under the
Securities Act. In addition, the Company recently registered 9,589,869 shares on
Form S-1/A, 11,754,530 shares on Form S-1 and 11,855,155 shares on Form S-8. The
remaining  shares  are  deemed to be  "restricted  securities,"  as that term is
defined  under  Rule  144  promulgated  under  the  Securities  Act.  See  "Risk
Factors-Shares Eligible for Future Sale".

      In  general,  under  Rule  144 as  currently  in  effect,  subject  to the
satisfaction of certain other  conditions,  a person,  including an affiliate of
the company (or persons whose shares are  aggregated),  who has owned restricted
shares of Common Stock  beneficially  for at least one year is entitled to sell,
within  any  three-month  period,  a number of shares  that does not  exceed the
greater of 1% of the total number of outstanding shares of the same class or the
average  weekly  trading  volume of the Company's  Common Stock on all exchanges
and/or  reported  through  the  automated   quotation  system  of  a  registered
securities  association  during the four  calendar  weeks  preceding the date on
which notice of the sale is filed with the Commission.  Sales under Rule 144 are
also subject to certain manner of sale provisions,  notice  requirements and the
availability of current public  information about the Company.  A person who has
not been an affiliate  of the Company for at least the three months  immediately
preceding the sale and who has beneficially  owned shares of Common Stock for at
least two years is entitled to sell such shares under Rule 144 without regard to
any of the limitations described above.
The Company has also recently filed  registration  statements for 9,589,869
shares  on Form  S-1/A,  11,754,530  shares on Form  S-1,  both of which  became
effective  on January  6,  1998,  and  11,855,155  shares on Form S-8 under the
Securities  Act covering  shares of Common Stock reserved for issuance under the
Company's  1993 Stock Plans,  the Outside  Directors  Stock Plan,  various stock
incentive  plans and the 1995 Stock Plan.  The  registration  of the  11,855,155
shares  registered in the Form S-8  automatically  became effective upon filing.
Shares  registered  under such  registration  statements are subject to Rule 144
volume limitations  applicable to Affiliates,  and will be available for sale in
the open market, unless such shares are subject to vesting restrictions with the
Company.

      In addition to the shares being  registered,  a substantial  number of the
shares of restricted  stock  presently  outstanding  including all of the shares
being  registered  herein  have been held at least one year.  Accordingly,  such
shares are eligible for resale  pursuant to Rule 144 at the rates and subject to
the conditions  discussed above, and the sale of any substantial  number of such
shares in the  public  market  including  the  shares  being  registered,  could
adversely affect prevailing market prices following the offering.

                            DESCRIPTION OF SECURITIES

Common Stock

     General.  The Company has  150,000,000  authorized  shares of common stock,
$.0001 par value (the  "Common  Stock"),  133,629,276  of which were  issued and
outstanding  as of  January 16, 1998.  All shares of Common  Stock  currently
outstanding are validly issued,  fully paid and  non-assessable,  and all shares
which  are the  subject  of this  Prospectus,  outstanding  and/or  when  issued
pursuant to a valid  exercise of options or  warrants,  will be validly  issued,
fully paid and non-assessable.  At the shareholders meeting held on November 26,
1997, the Company was authorized to increase the authorized  number of shares of
common  stock to  300,000,000,  and to effect a reverse  stock  split in any one
ratio from 1 for 2, to 1 for 10,  either,  both, or neither of which actions may
be taken in the  discretion  of the Board of  Directors.  The  Company  does not
presently have plans to effect either of the authorized actions, but there is no
assurance  that  either,  both  or  neither  of the  authorized  actions  may be
effected.

      Voting  Rights.  Each share of Common Stock entitles the holder thereof to
one vote, either in person or by proxy, at meetings of shareholders. The holders
are not permitted to vote their shares cumulatively. Accordingly, the holders of
more than fifty  percent  (50%) of the issued and  outstanding  shares of Common
Stock can elect all of the Directors of the Company.
See "Principal Shareholders."

      Dividend  Policy.  All shares of Common Stock are entitled to  participate
ratably in dividends  when and as declared by the  Company's  Board of Directors
out of the funds legally available  therefor.  Any such dividends may be paid in
cash,  property or additional  shares of Common Stock.  The Company has not paid
any dividends since its inception and presently  anticipates  that all earnings,
if any, will be retained for  development of the Company's  business and that no
dividends  on the shares of Common  Stock will be  declared  in the  foreseeable
future.  Any future dividends will be subject to the discretion of the Company's
Board of Directors and will depend upon,  among other things,  future  earnings,
the operating and financial condition of the Company, its capital  requirements,
general business conditions and other pertinent facts. Therefore there can be no
assurance that any dividends on the Common Stock will be paid in the future. See
"Dividend Policy".

      Miscellaneous  Rights  and  Provisions.  Holders  of Common  Stock have no
preemptive  or other  subscription  rights,  conversion  rights,  redemption  or
sinking fund provisions.  In the event of the dissolution,  whether voluntary or
involuntary,  of the  Company,  each share of Common  Stock is entitled to share
ratably in any assets available for distribution to holders of the equity of the
Company after satisfaction of all liabilities.

      The  Delaware  General  Corporation  Law  contains  certain  anti-takeover
provisions.  Section 203 of the Delaware General Corporation Law provides,  with
certain exceptions, that a Delaware corporation may not engage in any of a broad
range  of  business  combinations  with a  person  who  owns  15% or more of the
corporation's  outstanding  voting  stock (an  "interested  stockholder")  for a
period  of three  years  from the date  that such  person  became an  interested
stockholder  unless:  (i) the  transaction  resulting in a person's  becoming an
interested stockholder,  or the business combination is approved by the board of
directors  of  the   corporation   before  the  person   becomes  an  interested
stockholder;  (ii)  the  interested  stockholder  acquires  85% or  more  of the
outstanding  voting stock of the corporation  (excluding shares owned by persons
who are both  officers  and  directors  of the  corporation,  and shares held by
certain employee stock ownership  plans);  or (iii) the business  combination is
approved by the corporation's  board of directors and by the holders of at least
66 2/3% of the  corporation's  outstanding  voting stock at an annual or special
meeting, excluding shares owned by the interested stockholder.

Transfer Agent and Registrar

     The  transfer  agent  and  registrar  for the  Company's  Common  Stock  is
Manhattan Transfer Registrar Company, P. O. Box 361, Holbrook, New York 11741.

                                  LEGAL MATTERS

     The  validity of the  issuance  of the  securities  offered  hereby will be
passed  upon for the  Company  by the law firm of  Daniel B.  Kinsey,  P. C. Mr.
Kinsey  owns  1,870,000  shares of  Common  Stock and  options  exercisable  for
1,354,667 shares.

                                     EXPERTS

      The audited  financial  statements  of the Company as of December 31, 1995
and 1996, and for each of the three years in the period then ended, are included
herein and in the  registration  statement in reliance upon the report of Hays &
Company,  independent certified public accountants,  appearing elsewhere herein,
and upon the authority of said firm as experts in accounting and auditing.

                             ADDITIONAL INFORMATION

      The Company has filed with the  Securities  and Exchange  Commission  (the
"Commission")  a Registration  Statement on Form S-1 under the Securities Act of
1933, as amended,  with respect to the Common Stock.  This  Prospectus  does not
contain all of the information set forth in the Registration Statement,  certain
parts of which are omitted in accordance  with the rules and  regulations of the
Commission.  For further information with respect to the Company and such Common
Stock,  reference  is made to the  Registration  Statement  and the exhibits and
schedules  filed  therewith.  Statements  contained in this Prospectus as to the
contents  of  any  contract  or  other  document  filed  as an  exhibit  to  the
Registration  Statement  are not  necessarily  complete,  and in each  instance,
reference is made to the copy of such  contract or document  filed as an exhibit
to the Registration Statement, each statement being qualified in all respects by
such reference. The Registration Statement, including the exhibits and schedules
filed therewith,  may be inspected without charge at the Commission's  principal
offices  at 450 Fifth  Street,  N.W.  Washington,  D.C.  20549 and its  Regional
Offices located at Northwestern  Atrium Center,  500 West Madison Street,  Suite
1400,  Chicago,  Illinois 60661,  and Seven World Trade Center,  13th Floor, New
York,  New York 19948.  Copies of such  materials  may be obtained  upon written
request from the Public Reference  Section of the Commission,  450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates.
INDEX TO FINANCIAL STATEMENTS
Page
                                                                            ----
Report of Independent Certified Public Accountants .......................   F-1
Consolidated Balance Sheets as of December 31, 1996 and 1995 .............   F-2
Consolidated Statements of Operations for the
     years ended December 31, 1996, 1995 and 1994  .......................   F-3
Consolidated Statement of Shareholders' Equity for the
      years ended December 31, 1994, 1995 and 1996 .......................   F-4
Consolidated Statements of Cash Flows for the years ended
     December 31, 1996, 1995 and 1994  ...................................   F-5
Notes to Consolidated Financial Statements ...............................   F-6
Condensed Consolidated Balance Sheets as of September 30, 1997
     and December 31, 1996 (unaudited) ...................................   FQ-1
Condensed Consolidated Statements of Operations for the
     Nine Months ended September 30, 1997 and 1996 (unaudited) ...........   FQ-2
Condensed Consolidated Statements of Cash Flows for the Nine Months
     ended September 30, 1997 and 1996 (unaudited) .......................   FQ-3
Notes to Condensed Consolidated Financial Statements (unaudited) .........   FQ-4
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES

                       CONSOLIDATED FINANCIAL STATEMENTS

                  YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES

                       CONSOLIDATED FINANCIAL STATEMENTS

                  YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

                                    CONTENTS
                                                                              Page
                                                                              ----
Independent Auditor's Report ................................................. 1  

Consolidated Balance Sheets
December 31, 1996 and 1995 .................................................   2

Consolidated Statements of Operations
Years Ended December 31, 1996, 1995 and 1994 ...............................   3

Consolidated  Statement of Shareholders'  Equity
Years Ended December 31, 1994, 1995 and 1996 ...............................   4

Consolidated Statements of Cash Flows
Years Ended December 31, 1996, 1995 and 1994 ...............................   5

Notes To Consolidated Financial Statements .................................   6-28
Board of Directors and Shareholders
Computer Concepts Corp.
Bohemia, New York

                          INDEPENDENT AUDITOR'S REPORT

We have  audited  the  accompanying  consolidated  balance  sheets  of  Computer
Concepts  Corp.  and  subsidiaries  (the  "Company") as of December 31, 1996 and
1995,  and the related  consolidated  statements  of  operations,  shareholders'
equity and cash flows for each of the three years in the period  ended  December
31, 1996.  These financial  statements are the  responsibility  of the Company's
management.  Our  responsibility  is to express  an  opinion on these  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 financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the consolidated financial position of Computer Concepts
Corp. and  subsidiaries  as of December 31, 1996 and 1995, and the  consolidated
results of their  operations and their  consolidated  cash flows for each of the
three years in the period ended  December 31, 1996 in conformity  with generally
accepted accounting principles.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern.  As shown in the consolidated
financial  statements,  the Company continued to sustain  significant losses and
use substantial amounts of cash in operations during the year ended December 31,
1996.  These factors,  among others,  as discussed in Note 1 to the consolidated
financial  statements,  raise  substantial  doubt about the Company's ability to
continue as a going concern.  Management's  plans in regard to these matters are
also  described  in  Note  1.  The  financial  statements  do  not  include  any
adjustments that might result from the outcome of this uncertainty.

/s/Hays & Company

Hays & Company
October 23, 1997, except for Note 12
which is dated November 26, 1997
New York, New York
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)
December 31,
                                                                 -------------------
ASSETS                                                           1996           1995
                                                                 ----           ----     
 CURRENT ASSETS
Cash and cash equivalents.....................................  $ 5,675        $  579
Accounts receivable, net of allowance for doubtful
      accounts of $693 and $539 in 1996 and 1995, respectively.   9,044         4,475
Advances to officers...........................................     682           385
Inventories....................................................      29           123
Prepaid expenses and other current assets......................   1,036           431
                                                                -------       -------           
                                                                 16,466         5,993

INSTALLMENT ACCOUNTS RECEIVABLE, due after one year............   3,714           -

PROPERTY AND EQUIPMENT, net....................................   1,605         1,579

SOFTWARE COSTS, net (including $450  held for sale in 1995)....     949         2,950

EXCESS OF COST OVER FAIR VALUE OF NET ASSETS ACQUIRED,
    net of accumulated amortization of $2,628 and $1,369 in 1996 
    and 1995, respectively......................................  4,683         5,425

OTHER ASSETS ...................................................    254           134
                                                                -------       -------           
                                                                $27,671       $16,081
                                                                =======       ========        
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

   Accounts payable and accrued expenses........................ $4,227        $4,047
   Current portion of long-term debt............................    458           359
   Deferred revenues............................................  8,972         4,585
                                                                -------       -------           
                                                                 13,657         8,991

DEFERRED REVENUES ..............................................  3,964           281

LONG-TERM DEBT..................................................    526           800

COMMON STOCK SUBJECT TO REDEMPTION..............................     -          4,000
                                                                 ------       -------
                                                                 18,147        14,072
                                                                 ------       -------
COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
   Common stock, $.0001 par value; 150,000,000 shares authorized; 
   101,335,000 shares in 1996 and 57,475,000 shares in 1995 
   issued and outstanding.......................................     10             6
   Additional paid-in capital................................... 78,870        52,406
   Accumulated deficit..........................................(69,356)      (50,403)
                                                                -------       -------           
        Total shareholders'  equity.............................  9,524         2,009
                                                                -------       -------
                                                                $27,671       $16,081
                                                                =======       =======
The accompanying notes are an integral part of
 these consolidated financial statements.
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (in thousands, except per share data)
Year ended December 31,
                                                        ------------------------------------
                                                         1996            1995           1994
                                                         ----            ----           ----
REVENUES:
   Software licenses and support...................    $19,030        $16,302        $13,695
                                                       -------        -------        -------
COSTS AND EXPENSES:
   Cost of revenues and technical support..........      5,944          7,074          5,537
   Sales and marketing.............................     13,038          9,166          5,850
   General and administrative......................      8,009          8,191          7,936
   Amortization and depreciation...................      3,684          4,104          2,452
   Research and development........................      1,496          1,270            521
   Unusual charges.................................      2,590          1,102          3,178
   Reduction in carrying values of  long-lived 
     assets........................................        412          3,760            -
                                                       -------        -------        -------             
                                                        35,173         34,667         25,474
                                                       -------        -------        -------             
OPERATING LOSS.....................................    (16,143)       (18,365)       (11,779)
                                                       -------        -------        -------             

OTHER INCOME/(EXPENSE):

   Losses on securities............................        -              -            (428)
   Interest charge pertaining to discount on 
      convertible debentures.......................     (2,810)           -             -
                                                       -------       --------       --------             
NET LOSS...........................................   $(18,953)      $(18,365)      $(12,207)     
                                                       =======       ========       ========             
NET LOSS PER SHARE.................................     $(0.27)        $(0.37)      $(0.51)
                                                       =======       ========       ========             

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING ........     71,301         49,211         24,110
                                                       =======       ========       ========             

The accompanying notes are an integral part of
 these consolidated financial statements.
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                  Years ended December 31, 1994, 1995 and 1996
                                 (in thousands)
Additional                   Currency      Total
                                 Common Stock       Paid-in      Accumulated     Translation   Shareholders'
                              Shares      Amount    Capital      Deficit         Adjustment    Equity
                              ------      ------    -----------  -----------     ------------  -------------
BALANCE, JANUARY 1, 1994      20,690        $2       $31,997       $(19,831)       $ -          $12,168

Net proceeds from sales of
  common stock                 5,189        --         2,411           --           --            2,411
Common stock and options
  issued for services            375        --         1,011           --           --            1,011
Stock issued for business and
  asset acquisitions           7,979         1         4,476           --           --            4,477
Currency translation
  adjustment                    --          --          --             --           (21)            (21)
Net loss                        --          --          --          (12,207)        --          (12,207)
                              ------    ------        ------        -------      -------        ------- 
  BALANCE, DECEMBER 31, 1994  34,233         3        39,895        (32,038)        (21)          7,839

Net proceeds from sales of
  common stock                20,886         3         8,864           --           --            8,867
Common stock and options
  issued for services          2,137        --         3,234           --           --            3,234
Common stock and options
  issued for settlement of
  trade payables                 219        --           413           --           --              413
Currency  translation
  adjustment                    --          --          --             --            21              21
Net loss                        --          --          --          (18,365)        --          (18,365)
                              ------    ------        ------        -------      -------        ------- 
BALANCE, DECEMBER 31, 1995    57,475         6        52,406        (50,403)        --            2,009

Net proceeds from sales of 
  common stock and options 
  exercised                    6,365         1         1,996           --           --            1,997
Common stock and options issued
  for services                 7,680         1         3,445           --           --            3,446
Common stock issued subject
   to forfeiture               5,075        --         1,508           --           --            1,508
Conversion of common stock
   formerly subject to
   redemption                  4,490        --         4,000           --           --            4,000
Conversion of convertible
   debentures                 16,632         2        12,739           --           --           12,741
Common stock issued for
   settlements                 3,618        --         2,776           --           --            2,776
Net loss                        --          --          --          (18,953)        --          (18,953)
                             -------    ------       -------       --------     -------        --------
BALANCE, DECEMBER 31,1996    101,335       $10       $78,870       $(69,356)       $--         $  9,524
                             =======    ======       =======       ========     =======        ========

The accompanying notes are an integral part of
 these consolidated financial statements.
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
Year ended December 31,
                                                                  -------------------------------
                                                                  1996         1995         1994
                                                                  ----         ----         ----
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                         $(18,953)   $(18,365)   $(12,207)
Adjustments to reconcile net loss to net cash used in
  operating activities:
  Amortization and depreciation:
      Property and equipment                                          806         672         599
      Software costs                                                1,910       1,924       1,276
      Excess of cost over fair value of net assets acquired           959       1,480         577
      Other                                                             9          28        --
      Non-cash interest charge for discount on convertible debt     2,810        --          --
  Provision for doubtful accounts                                     154           7         400
  Common stock and options issued for services                      3,446       3,234       1,011
  Common stock issued subject to forfeiture                         1,508        --          --
  Non-cash unusual charges                                          2,415         269       3,178
  Reduction in carrying values of
      long-lived assets                                               412       3,760        --
  Loss on investment in securities                                   --          --           428
  Changes in operating assets and liabilities, net of 
         effect of acquisitions:
      Accounts receivable                                          (4,723)       (802)     (1,924)
      Inventories                                                      94          91        (146)
      Prepaid expenses and other current assets                      (637)        174         (83)
      Installment accounts receivable                              (3,714)       --          --
      Other assets                                                   (129)         39         111
      Accounts payable and  accrued expenses                          569        (998)      1,408
      Deferred revenues                                             8,070       1,036      (1,807)
                                                                   ------      ------      ------
   Net cash used in  operating activities                          (4,994)     (7,451)     (7,179)
                                                                   ------      ------      ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures                                                 (832)       (547)     (1,541)
Software development and technology purchases                        (526)       (545)        (75)
Proceeds from sale of technology                                      450        --          --
Net change in advances to officers                                   (297)       (271)        232
Capitalization of  software development costs                        --          --           (96)
Net investments in marketable securities                             --          --         2,165
Acquisition of DBopen, net of  cash acquired                         --          --          (207)
Additional consideration for MapLinx acquisition                       56        --          --
Additional consideration  for  Softworks  acquisition                (515)       (320)       --
                                                                   ------      ------      ------
   Net cash (used in) provided by investing activities             (1,664)     (1,683)        478
                                                                   ------      ------      ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from sales of common  stock and options                1,997       8,867       2,411
Net proceeds from sale of convertible debentures                    9,931        --          --
Net change in long-term debt                                         (174)        345         150
Repayment of loans payable to shareholders, net                       --         --          (193)
                                                                   ------      ------      ------
   Net cash provided by financing activities                       11,754       9,212       2,368
                                                                   ------      ------      ------
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS                5,096          78      (4,333)
CASH AND CASH EQUIVALENTS, beginning of year                          579         501       4,834
                                                                   ------      ------      ------
CASH AND CASH EQUIVALENTS, end of year                             $5,675      $  579      $  501
                                                                   ======      ======      ======
The accompanying notes are an integral part of
 these consolidated financial statements.
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

1.   BASIS OF PRESENTATION

     Computer Concepts Corp. and subsidiaries (the "Company")  design,  develop,
market and support  information  delivery software products,  including end-user
data access tools for use in personal  computer and  client/server  environments
and systems management  software products for corporate  mainframe data centers.
The Company has recently entered into the technology infrastructure construction
business  whereby for a fee the Company assists in the design,  construction and
installation of building technology  systems.  The Company's principal market is
the United States. Export revenue is principally made to European distributors.

     The  Company  has  incurred   consolidated   net  losses  of   $18,953,000,
$18,365,000 and  $12,207,000  during the years ended December 31, 1996, 1995 and
1994,  respectively,  and cumulative net losses of $69,356,000  through December
31,  1996.  For the year ended  December  31,  1996,  net cash used in operating
activities was $4,994,000, reflecting the above net loss being offset by various
non-cash  items  described in the  accompanying  consolidated  statement of cash
flows. The Company's cash requirements were primarily  financed through the sale
of  convertible  debentures  and common  stock and  exercises  of stock  options
approximating $11,928,000 for the year ended December 31, 1996. The Company does
not maintain a credit facility with any financial  institution.  The Company has
continued to incur  significant  expenses  with respect to the  development  and
marketing  of  its  d.b.Express   product   technology  without  generating  any
significant  revenue.  As a result of  continued  operating  losses,  the use of
significant  cash in operations and the lack of sufficient  funds to execute its
business  plan,  among  other  matters,  there is  substantial  doubt  about the
Company's ability to continue as a going concern.  No adjustments have been made
with respect to the consolidated  financial  statements to record the results of
the ultimate outcome of this uncertainty.

     Management's  plans to remain a going concern,  as more fully  described in
these notes,  require  additional  financing  until such time as sufficient cash
flows are generated from operations.  This financing is anticipated to be in the
form of additional equity and/or  convertible  debenture  investments,  however,
there can be no assurances that the Company will be able to obtain sufficient
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

1.   BASIS OF PRESENTATION (continued)

financing  to  execute  its  business  plan.  The  Company's  current  source of
operating  revenue  continues  to be derived from its  wholly-owned  subsidiary,
Softworks, Inc. ("Softworks"). Management's plans to remain a going concern rely
upon achieving  positive cash flows from operations through the continued growth
of  Softworks  and the  successful  exploitation  of the  Company's  d.b.Express
product.  While to  date,  revenue  from  d.b.Express  has  been  insignificant,
management  believes that its  proprietary  software  technology has significant
potential in several areas,  and solves certain  significant  business issues in
the  telecommunications  and internet related  markets.  In order to realize the
potential  of this  product,  management  will need to  aggressively  pursue all
marketing  opportunities.  To date, the Company has incurred  significant losses
(both cash  expenses  and  non-cash  expenses as  described in these notes) as a
result  of  the  development  and  marketing  of  d.b.Express.  There  can be no
assurances that the Company will be successful in achieving  positive cash flows
from operations with respect to the d.b.Express  product.  The Company continues
to pursue license and development agreements with various companies.  While none
of the Company's existing agreements or development  opportunities,  that relate
to  d.b.Express,  provide  sales  commitments,   management  believes  that  the
successful exploitation of its d.b.Express technology,  as well as the continued
growth of Softworks, will eventually enable the Company to achieve positive cash
flows from operations.  Unless the Company determines to discontinue its pursuit
of d.b.Express revenue (which requires  significant  financial  resources),  the
Company will need to generate  positive cash flows from operations from the sale
of  d.b.Express  product in order to decrease its  dependency on cash flows from
financing activities and remain a going concern. The Company is currently in the
process of negotiating the sale of convertible securities for an amount that the
Company believes will sustain its operations through April 1998; however,  there
can be no assurance  that the Company will be successful in these  efforts.  See
Note 12 - "Subsequent events" for updated information.

The Company is a defendant in several lawsuits,  including a class action claim,
as  described  in Note 11,  Legal  Matters.  Based on  consultation  with  legal
counsel,  the Company and its officers believe that  meritorious  defenses exist
regarding the lawsuits and claims and they are vigorously  defending against the
allegations.  The  Company is unable to predict  the  ultimate  outcome of these
claims, which could have a material adverse affect on the consolidated financial
position and results of  operations of the Company.  Accordingly,  the financial
statements  do not reflect any  adjustments  that might result from the ultimate
outcome of these litigation matters.
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

2.   SIGNIFICANT ACCOUNTING POLICIES

   Principles of Consolidation

   The  consolidated  financial  statements  include  the  accounts  of Computer
Concepts Corp. and its wholly-owned  subsidiaries.  All significant intercompany
transactions and balances have been eliminated in consolidation.

   Revenue Recognition

     License  revenue is  recognized  at the time of delivery and  acceptance of
software  products,  where  collectibility  is generally  deemed probable and no
significant\insignificant  obligations exist. Where realization of sale proceeds
is not deemed probable,  license revenue is recognized on the installment (cash)
method  following  delivery.  Maintenance  revenue is  deferred  and  recognized
ratably over the maintenance period.  Consulting fees are recognized as services
are performed.

   Installment Accounts Receivable

   Perpetual license agreements may be executed under installment  payment terms
with monthly, quarterly or annual payment terms for up to five years. Revenue is
deferred and recognized over the period of the installment payment plan.

   Property and Equipment

   Property and equipment are stated at cost and  depreciated on a straight-line
basis  over  the  estimated  useful  lives  of  the  related  assets.  Leasehold
improvements  are  amortized  over the  lives of the  respective  leases  or the
service lives of the related  assets,  whichever is shorter.  Capitalized  lease
assets are  amortized  over the shorter of the lease term or the service life of
the related assets.

   Software Costs

     Costs  associated with the  development of software  products are generally
capitalized once  technological  feasibility is established.  Purchased software
technologies are recorded at cost and software technologies acquired in purchase
business  transactions  are recorded at estimated  fair value.  Amortization  of
software  costs begins when  products  become  available  for customer  release.
Purchased  software  technologies  and software costs  associated with the basic
technology development are amortized on a straight-line basis over the estimated
economic  lives  of  the  products,  generally  five  years.  Development  costs
associated  with specific  versions of software are amortized over the estimated
life of the version,  generally 12 to 24 months.  Management  evaluates  whether
these intangible assets are impaired (and appropriately adjusts carrying values)
by comparing the net carrying  value of the asset to the  undiscounted  expected
future cash flows to be generated by the asset.
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

2.   SIGNIFICANT ACCOUNTING POLICIES (Continued)

   Excess of Cost Over Fair Value of Net Assets Acquired

   The  excess of cost over the fair value of net assets  acquired  in  purchase
business transactions is amortized on a straight-line basis over periods ranging
from three to ten years. Impairment of the excess of cost over fair value of net
assets acquired is evaluated by comparing the estimated future undiscounted cash
flows from the related assets of the acquired business to the carrying amount of
such assets.

   It is the Company's policy to periodically  review and evaluate whether there
has been a  permanent  impairment  in the value of  intangibles  and  adjust the
carrying value accordingly.  Factors considered in the valuation include current
operating results, trends and anticipated undiscounted future cash flows.

  Income Taxes

  Deferred tax assets and  liabilities  are recognized  based on the differences
between the financial and tax bases of assets and liabilities  using enacted tax
rates in effect for the year in which  differences are expected to reverse.  The
Company  has  recorded  no  provisions  for  income  taxes  in the  accompanying
consolidated financial statements as a result of incurred losses.

   Net Loss Per Share

   Net loss per share is based on the weighted  average  number of common shares
outstanding.  Outstanding  stock  options,  warrants and other  potential  stock
issuances have not been considered in the computation  since the effect of their
inclusion would be antidilutive.

   Segment Information

     The Company is engaged in only one business segment,  operating principally
in North America,  during the years 1994 through 1996.  Domestic export revenue,
made principally to European distributors, is summarized as follows:
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

2.   SIGNIFICANT ACCOUNTING POLICIES (continued)
Year ended December 31,
------------------------------------------------------------
                         1996            1995           1994
                         ----            ----           ----
Germany               $1,697,000     $1,361,000     $1,088,000
United Kingdom           881,000        528,000        367,000
Canada                   304,000        282,000        309,000
Australia                278,000        113,000         54,000
Japan                    234,000        274,000        269,000
Other Locations          610,000        174,000        344,000
                      ----------     ----------     ----------
                      $4,004,000     $2,732,000     $2,431,000
                      ==========     ==========     ==========
Cash and Cash Equivalents

  The Company considers all investments with original maturities of three months
or  less  to  be  cash  equivalents.  The  carrying  amount  of  temporary  cash
investments  approximates  the fair value because of the short maturity of those
instruments.

   Use of Estimates

   In preparing  consolidated  financial statements in conformity with generally
accepted accounting principles,  management makes estimates and assumptions that
affect the  reported  amounts  of assets  and  liabilities  and  disclosures  of
contingent  assets and  liabilities  at the date of the  consolidated  financial
statements,  as well as the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.

3.   ACQUISITIONS

   Softworks, Inc.

     In October 1993, the Company completed the acquisition of all of the common
stock of Softworks, a privately held Maryland company founded in 1977, providing
systems management software products.

The purchase price approximated  $5,700,000,  which included  $2,000,000 in cash
and 1,000,000 shares of the Company's restricted common stock, 500,000 shares of
which were  contingently  issuable upon  realizing  certain 1993 revenue  goals.
These goals were achieved and the shares were issued.  The  acquisition has been
accounted for using the purchase method of accounting.  Accordingly,  assets and
liabilities  were  recorded at their fair values as of  September  1, 1993,  the
effective  date of the  acquisition,  and the  operations of Softworks have been
included in the Company's consolidated statements of operations since that date.
The excess of cost over the fair value of net assets acquired,  which originally
approximated  $5,484,000,  is being amortized over ten years. The agreement also
requires the Company to make additional contingent purchase consideration
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

 3.   ACQUISITIONS (continued)

   Softworks, Inc. (continued)

payments to two of Softworks'  former  shareholders  based upon certain  product
revenue for the years 1995 through 1998, up to a maximum of $1,000,000 each, for
an aggregate  maximum of $2,000,000.  Through December 31, 1996, the Company has
incurred  a  liability  of  $924,000,  ($802,000  of  which  was  paid)  to  the
non-employee  former   shareholders,   which  has  been  treated  as  additional
consideration in connection with the acquisition and,  accordingly,  included in
the  excess  of cost  over  the  fair  value of net  assets  acquired,  as these
individuals did not continue in the employment of the Company  subsequent to the
acquisition. No other contingent payments have been made under the terms of this
agreement.

  Superbase

  In June 1994,  the Company  completed  the purchase of the  Superbase  product
technology  and certain  related  assets from  Software  Publishing  Corporation
("SPC") in exchange  for  2,031,175  shares of the  Company's  restricted  stock
valued at approximately $4,000,000 and $75,000 in cash. SPC received a valuation
guarantee  for the stock  issued,  and was  permitted  to sell such  stock in an
orderly  manner over a twelve month  period  following  registration,  which was
originally  required to be completed  before  December 31, 1994.  The  agreement
provided  that should such  registration  statement not be effective by December
31, 1994, SPC, at its option, could require the Company to repurchase the shares
issued for the amount of the valuation guarantee.

On January 19, 1995,  SPC and the Company  entered  into an extension  agreement
whereby the Company was given an extension to file the registration statement to
February 15, 1995. In exchange for that extension, the Company agreed to pay SPC
$560,000  (the  "Penalty  Amount"),  payable  $300,000 in cash in three  monthly
installments  ($100,000 was paid in 1995 and $200,000 was paid in October 1996),
and $260,000 in  additional  shares of Company  common stock.  These  additional
shares also had a valuation  guarantee.  As a result of the Company's failure to
meet the December 31, 1994 registration  statement filing deadline,  the Company
recorded the Penalty Amount,  $560,000, as an unusual charge in the December 31,
1994 consolidated  statement of operations.  The extension  agreement included a
provision that if the Company did not meet the February 15, 1995  deadline,  and
the  registration  was not completed by May 31, 1995, SPC was entitled to either
of the following  (at SPC's  option):  (i) the payment of an additional  penalty
payment equal to $638,400  payable  equally in cash and Company common stock, or
(ii) the repurchase of the shares as provided for in the agreement.  The Company
did not meet the May 31, 1995 requirement and SPC decided to receive the penalty
equally  in  cash  and  stock.  Accordingly,  the  The  Company  accrued  for an
additional penalty payment of $638,400 as an unusual charge in 1995.

In October  1996,  the Company and SPC signed a  Settlement  and Mutual  Release
Agreement.  This  agreement  permitted SPC to accelerate its ability to sell its
remaining shares, with the Company paying $619,420 in cash ($200,000 of the cash
portion of the Penalty Amount,  $319,200 of the May 31, 1995 additional  penalty
amount,  and $100,220 of related  interest  expense)  and issuing an  additional
309,000  shares  of the  Company's  common  stock,  which  were  fair  valued at
$183,000, to settle all claims between the parties. The Company recorded a
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

 3.   ACQUISITIONS (continued)

  Superbase (continued)

total charge of $515,000 in 1996, reflecting such final settlement. During 1996,
the Company issued 5,393,000 shares of its common stock (consisting of 4,490,000
shares upon the redemption  conversion and 903,000 shares  relating to penalties
and the final settlement)  ending its commitments under the SPC agreements.  The
stock originally issued to SPC was included in the accompanying balance sheet as
"Common Stock Subject to  Redemption"  which was classified as debt in the event
the Company would have been required to repurchase  the shares at the guaranteed
price.  This amount has been  reclassified to equity as the ultimate  resolution
did not require the Company to repurchase the shares.

   During  the year  ended  December  31,  1995,  as a result  of the  Company's
decision to not invest in the further development and marketing of the Company's
Superbase  software  technology,  the Company recorded a charge to operations of
$2,440,000.  This reduced the carrying  value of this asset to $450,000.  During
1996,  the Company sold the  underlying  software  technology,  with the Company
realizing the cash proceeds of $450,000.

   MapLinx, Inc.

During  December  1994,  the Company  completed the  acquisition of MapLinx Inc.
("MapLinx"),  a developer and provider of personal computer database  geographic
utilities used with Windows  database and  spreadsheet  products.  In connection
with the acquisition, the Company issued 1,672,476 shares having a fair value of
$900,000 at the  acquisition  date. The  acquisition has been accounted for as a
purchase and, accordingly, assets acquired and liabilities assumed were recorded
at their fair values as of December 31, 1994 and the operations of MapLinx,  are
included in the Company's consolidated statements of operations since that date.
The cost of the  acquisition  exceeded the fair value of net assets  acquired by
$904,000 and has been  classified  as the "excess of cost over fair value of net
assets  acquired" and was being amortized on a straight line basis over a period
of three years.

Since its  acquisition,  MapLinx'  revenues had  diminished  and it had incurred
continuing  losses. As a result, the Company had evaluated the carrying value of
the  unamortized  portion of the  MapLinx  excess of cost over fair value of net
assets acquired and unamortized software development costs, aggregating $412,000
at December 31, 1996, and had determined that its  recoverability  was doubtful.
Accordingly,  the Company wrote-off such long-lived assets in the fourth quarter
of 1996.  The Company is in the process of  attempting to sell the net assets of
MapLinx.  There can be no assurances  that the Company will be successful in its
attempt to sell the net assets of MapLinx.

See Note 12 - "Subsequent events" for updated information.
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

 3.   ACQUISITIONS (continued)

   MapLinx, Inc. (continued)

Financial  information  pertaining  to  MapLinx  as of and for the  years  ended
December 31,1996, and 1995, are summarized below:
1996                1995
                                     ----                ----
Current Assets                     $366,000            $831,000
Total Assets                        429,000           1,520,000
Current Liabilities                 517,000             729,000
Total Liabilities                   520,000             743,000
Net Revenues                      2,220,000           3,780,000
Net (Loss)                       (1,497,000)           (508,000)
DBopen, Inc.

     During  October  1994,  the Company  entered  into an  agreement to acquire
Dbopen, Inc. ("DBopen"), a provider of personal computer database administration
tools employing  client/server  technology.  In connection with the acquisition,
the Company  issued  $939,300 of restricted  common stock and assumed  long-term
debt of approximately  $423,000.The  agreement provided for a price guarantee on
the initial  stock  issuance and the issuance of  additional  restricted  common
stock upon the timely  completion  of certain new products as well as payment of
additional consideration over a four-year period based on the revenue and profit
contribution  of DBopen.  The  acquisition  has been accounted for as a purchase
and,  accordingly,  Dbopen's assets and liabilities  were recorded at their fair
values as of December 31, 1994 and the  operations of DBopen are included in the
Company's  consolidated statement of operations since that date. The cost of the
acquisition  exceeded the fair value of net assets acquired by $1,916,000  which
has been  classified  as the  "excess  of cost  over  fair  value of net  assets
acquired" at December 31, 1994 and is being amortized on the straight line basis
over a period of three  years.  The  historical  operations  of  DBopen  are not
material to the historical operations of the Company.

  In  the  third  quarter  of  1995,  certain  new  products  pertaining  to the
acquisition  of DBopen  were  introduced  into the  marketplace.  As a result of
limited sales and changing market  conditions during the fourth quarter of 1995,
it became apparent that  significant  additional  expenditures  would have to be
incurred  in order to modify the DBopen  products to meet such  changing  market
conditions. In the opinion of management, such additional costs would exceed the
projected  benefits  and the  decision  was made to  discontinue  the  products.
Consistent  with this  business  decision,  the Company  wrote-off the remaining
carrying  value of its  investment in Dbopen of $1,320,000 in the fourth quarter
of 1995.
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

4.  PROPERTY AND EQUIPMENT
    Property and equipment consist of the following:
December 31,
                                                                   -------------------                           
                                                  Useful life
                                                   in years         1996          1995
                                                  -----------      -----        ------
                                                                      (in thousands)
Computer equipment and software              3 to 7          $2,807      $ 2,019
      Furniture and fixtures                       5 to 7             279          250
      Leasehold improvements                       7                  473          458
                                                                  -------      ------- 
                                                                    3,559        2,727
      Less accumulated depreciation
          and amortization                                        ( 1,954)     ( 1,148)
                                                                  -------      -------  
                                                                  $ 1,605      $ 1,579
                                                                  =======      =======
5.   SOFTWARE COSTS
     Software costs consists of the following:
December 31,
                                                         -------------------
                                                         1996           1995
                                                         ----           ----    
                                                             (in thousands)
Capitalized software development costs                  $3,538         $3,303
Purchased and acquired software technologies
  (including $450  held for sale in 1995)                1,894          2,220
                                                        ------         ------          
                                                         5,432          5,523
Less accumulated amortization                           (4,483)        (2,573)
                                                        ------         ------
                                                        $  949         $2,950
                                                        ======         ======
6.   ACCOUNTS PAYABLE AND ACCRUED EXPENSES
     Accounts payable and accrued expenses consist of the following:
December 31,
                                                         --------------------
                                                         1996            1995
                                                         ----            -----
                                                             (in thousands)
Accounts payable                                  $1,253         $1,909
       Due to SPC (Note 3.b)                                -              838
       Accrued payroll and benefits                         616            675
       Other accrued expenses                             2,358            625
                                                         ------         ------   
                                                         $4,227         $4,047
                                                         ======         ======
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

7.   SHAREHOLDERS' EQUITY

     See Note 12 - "Subsequent  events" for updated  information with respect to
shareholders' equity.

     Common Stock

     During 1996, the Company consummated sales of restricted common stock under
various  private  placement  agreements,  including  sales of  convertible  debt
securities.  Proceeds  raised from these sales  aggregated  $11,928,000,  net of
offering  commissions and expenses of approximately  $1,664,000 and the discount
of $2,810,000  pertaining to the convertible  debt. A total of 19,286,000 shares
were  sold at  prices  ranging  from  $0.20 to $2.00  per  share.  Approximately
9,104,000 shares were also issued in 1996 pursuant to valuation guarantees under
stock transactions  during the years ended December 31, 1994 and 1995 (3,711,000
shares) and  pursuant to  valuation  guarantees  and the  settlement  of the SPC
transaction described in Note 3 (5,393,000 shares).

  During 1995, the Company  consummated  sales of restricted  common stock under
various  private  placement   agreements.   Proceeds  raised  from  these  sales
aggregated $8,867,000, net of offering commissions and expenses of approximately
$1,500,000. A total of 19,340,000 shares (excluding 555,000 shares sold under an
option) were sold at prices  ranging  from $0.20 to $2.00 per share.  A total of
991,000 shares were also issued pursuant to valuation guarantees.

  During 1994, the Company  consummated  sales of restricted  common stock under
various  private  placement   agreements.   Proceeds  raised  from  these  sales
aggregated  $2,411,000,  net of offering commissions and expenses  approximating
$389,000.  A total of 4,589,000 shares were sold (excluding  600,000 shares sold
under an option) at prices ranging from $0.50 to $1.25 per share.

     Convertible Debt Securities

     In 1996,  the Company  received net proceeds of  approximately  $9,931,000,
net of commissions of $1,371,000 relating to the placement of convertible debt
securities.  These  instruments were convertible to 16,632,000  shares of common
stock of the  Company  at  discounts  ranging  from 20% to 32.5% from the market
price on the date of conversion.  In connection  with this  discount,  SEC Staff
comments and consistent  with SEC observer  comments at the Emerging Issues Task
Force  meeting on March 13, 1997 related to this topic,  the Company  recorded a
non-cash   interest  charge  related  to  these   securities  of   approximately
$2,810,000. All of these convertible debt securities were converted during 1996.

     Transactions with Officers, Employees and Consultants

     In November  1996, the Company  issued  2,300,000  restricted and 2,775,000
unrestricted shares of the Company's common stock to various officers, employees
and consultants.  These shares are subject to forfeiture if the Company does not
ultimately  sign  contracts  valued in excess of  $3,000,000  during 1997.  Such
shares had a fair value at the date of  issuance of  $1,508,000,  which has been
recorded as a non-cash  charge in the Company's  statement of operations for the
year ended December 31, 1996. In addition to the shares  identified  above,  the
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

7.   SHAREHOLDERS' EQUITY (continued)

     Transactions with Officers, Employees and Consultants (continued)

Company issued 7,680,000  shares of common stock in 1996 to officers,  employees
and consultants  which were not subject to forfeiture.  These additional  shares
had a fair value at the date of issuance of  $3,446,000,  which is included as a
non-cash  charge in the  Company's  statement of  operations  for the year ended
December 31, 1996.

In June 1996,  the  Company  entered  into an  agreement  with a  consultant  in
connection with the marketing of the Company's d.b.Express product.  Pursuant to
such agreement, the consultant has the ability to earn 250,000 options for every
$1,250,000 in net  d.b.Express  revenue,  up to a maximum of 1,000,000  options.
This  agreement  expires on December 31, 1997,  and the options have an exercise
price of $5.00 per share (originally priced at $.50 per share). In addition, the
Company  entered into  agreements  with this  consultant  which  provide for the
following additional compensation:

 .     425,000  options to purchase  the  Company's  common stock at an exercise
       price of $0.65  per  share,  which  expires  on  December  31,  1998.  In
       connection with this grant, the Company recorded a non-cash charge to the
       statement  of  operations  of $388,790 for the year ended  December  31,
       1996.
 
 .     The consultant was loaned  $250,000  payable in five annual  installments
       of  $50,000,  plus  interest  at 6%  per  annum.  In  January  1997,  the
       consultant repaid the entire loan balance including interest through that
       date.

 .     The  consultant  receives  annual  compensation  of  $80,000  per  annum,
       renewable  automatically  with  termination  on  one  year's  notice.  In
       addition,  the Company paid  approximately  $220,000 of other agreed-upon
       expenses of the consultant during 1996.

 .     A bonus of $200,000 payable should the Company achieve  $5,000,000 of net
       d.b.Express revenue specifically related to the consultant's activities.

Consulting  expenses  related  to  restricted  stock and  option  issuances  and
reflected in the consolidated  statements of operations  amounted to $1,118,000,
$2,155,000, and $1,199,000 for the years ended December 31, 1996, 1995 and 1994,
respectively.

In December  1995,  the Company  entered  into an agreement  with Perot  Systems
Corporation  ("Perot")  in  connection  with the  marketing  of the  d.b.Express
technology.  The Company issued  500,000  options at $2.56 per share to purchase
common stock in  connection  with the  agreement  and  recognized  an expense of
$235,000  representing  the  fair  value  of  such  options.  Pursuant  to  such
agreement, Perot also has the ability to earn up to 2,250,000 options at a price
of   $2.56   per   share,   at   the   rate   of   50,000   options   for  every
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

7.  SHAREHOLDERS' EQUITY (continued)

     Transactions with Officers, Employees and Consultants (continued)

$1,000,000 of d.b.Express product revenue in excess of $5,000,000, over a period
of two  years,  commencing  December  1995.  Additionally,  Perot  could  earn a
commission of 30% on all future sales of d.b.Express  over a period of two years
commencing  December 1995.  During 1996, the agreement was amended to change the
terms such that Perot  would  receive:  a) 30% of gross  revenue  created by the
sales  or  license  of  the  d.b.Express   technology   from  sources   directly
attributable  to Perot,  or, b) 10% of gross  revenue from sources not generated
directly by Perot,  but where Perot  participates  substantially in the sales or
license  process.  To date, no significant  revenue has been earned through this
agreement and, accordingly, no additional options or commissions have been paid.
In August 1997,  the Company gave notice to  terminate  the contract  with Perot
effective December 1997 (Note 11).

     During the fourth  quarter of 1995,  the Company  also entered into various
other  marketing  and  consulting  agreements  expiring at various dates through
November  1997.  The Company  issued  1,678,000  options at $1.50 per share,  to
purchase  common  stock in  connection  with  these  agreements  and  recognized
expenses  aggregating  $1,056,000  representing  the fair value of such options.
Pursuant  to such  agreements,  these  firms also have the ability to earn up to
1,600,000  options at a price of $1.50 per share  contingent upon defined levels
of  d.b.Express  product  revenue.  In April 1997,  1,000,000  of the  1,678,000
options described above were rescinded and the Company issued 400,000 restricted
shares  of the  Company's  common  stock  to  such  consultants  in lieu of such
options.

  During July and August 1994, the Company entered into one-year agreements with
several financial relations and advisory firms to assist in expanding individual
and institutional  investor interest in the Company, as well as to advise in the
development of its business, including acquisition financing. The Company issued
600,000  options  at $.01 per share and  700,000  options  at $1.12 per share to
purchase common stock in connection with the agreements.  The difference between
the fair market value of the  Company's  common stock and the exercise  price of
the options issued, approximating $706,000 was included in "prepaid expenses and
other current  assets" and was being  amortized over the terms of the applicable
agreements at September 30, 1994. In the fourth  quarter of 1994, as a result of
the inability to realize the amounts previously deferred,  the Company wrote off
the remainder of these deferred costs.

  During December 1994, the Company issued 350,000 shares of common stock having
a fair market value of $339,000 to a consultant for telecommunication consulting
services performed in the fourth quarter of 1994.

     Stock Option Plans

     During October 1993, the Company  adopted the Employees'  1993 Stock Option
Plan (the "Employees' Plan"), the 1993 Directors, Officers and Consultants Stock
Option  Plan  (the "DOC  Plan")  and the 1993  Prior  Service  Plan (the  "Prior
Services Plan"),  collectively  the "1993 Plans," all of which are non-qualified
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

7.   SHAREHOLDERS' EQUITY (continued)

     Stock Option Plans (continued)

plans providing for the grant of stock or options to eligible participants.  The
Company may issue stock or options for up to an aggregate  20% of the  Company's
outstanding   common  stock  under  the   Employees'   and  DOC  Plans  (without
consideration of the options issued under the Prior Services Plan). The Board of
Directors has the authority to determine  all terms and  provisions  under which
options are granted,  including  the persons to whom  options are  granted,  the
number of shares and  exercise  price per share of common stock to be covered by
each option and the time or times at which options shall be exercisable.

During 1994, the Board of Directors  authorized a restriction on the exercise of
substantially  all  outstanding  options and warrants.  Exercises of options and
warrants are subject to the requirement that, at the time of exercise,  at least
25% of the  Company's  authorized  capital  stock be  unissued,  unreserved  and
available for issuance.

On March 20, 1996, the Company's  shareholders  approved the  termination of the
above 1993 Plans and the  adoption of the 1995 Stock  Incentive  Plan (the "1995
Incentive Plan").  Eligible participants in the 1995 Incentive Plan are officers
and  employees of the Company and  consultants  to the Company.  Pursuant to the
1995  Incentive  Plan,  the Board of Directors  or a committee  thereof may also
grant restricted stock,  stock appreciation  rights,  performance grants or such
other types of awards as it may  determine.  The total  number of common  shares
issuable upon the exercise of all stock options  under the 1995  Incentive  Plan
may not exceed 10,000,000 shares,  subject to adjustments upon the occurrence of
certain events, as defined. The 1995 Incentive Plan provides for the granting of
(i) incentive  options to purchase the Company's common stock at the fair market
value on the date of  grant  and (ii)  non-qualified  options  to  purchase  the
Company's  common  stock at not less than the fair  market  value on the date of
grant.

On March 20, 1996, the Company's shareholders also approved the Outside Director
Stock Option Plan (the  "Director  Plan").  Directors of the Company who are not
full-time  employees of the Company are eligible to  participate in the Director
Plan. The total number of common shares  issuable upon the exercise of all stock
options  under the  Director  Plan may not  exceed  500,000  shares,  subject to
adjustments upon the occurrence of certain events,  as defined.  Pursuant to the
Director Plan, each non-employee director will be granted options with five year
terms commencing  March 1, 1996, and on the first day of each March  thereafter,
to  purchase  that  number of shares of common  stock  having a market  value of
$50,000. Options granted shall vest in one year.

The  Company  has also  issued  options  during  1996,  1995 and 1994 with terms
determined  by the Board of Directors  at the time of grant (the  "Miscellaneous
Options").
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

7.   SHAREHOLDERS' EQUITY (continued)

     Stock Option Plans (continued)

The Company has adopted the  disclosure  provisions  of  Statement  of Financial
Accounting Standards No. 123,  "Accounting for Stock-Based  Compensation" ("SFAS
123").  The Company applies APB Opinion No. 25,  "Accounting for Stock Issued to
Employees," and related interpretations in accounting for its plans and does not
recognize compensation expense for its employee stock-based  compensation plans.
If the Company had elected to recognize compensation expense based upon the fair
value at the date of grant for awards  under  these  plans  consistent  with the
methodology prescribed by SFAS 123, the effect on the Company's net loss and net
loss per  share  for the  year  ended  December  31,  1996 and 1995  would be as
follows:
Year ended December 31,
                                            ------------------------ 
                                            1996                1995
                                            ----                ----
Net Loss             As Reported         $18,953,000         $18,365,000
                     Pro Forma           $19,363,000         $20,202,000

Net Loss Per Share   As Reported            $0.27               $0.37
                     Pro forma              $0.27               $0.41
These pro forma amounts may not be representative of future disclosures  because
they do not take into effect pro forma  compensation  expense  related to grants
made before 1995.
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

7.   SHAREHOLDERS' EQUITY (continued)

     Stock Option Plans (continued)

The fair  value of  options  granted  during  1996 and 1995,  respectively,  are
estimated on the date of grant using the Black-Scholes option-pricing model with
the following  assumptions:  (1) expected volatility ranging from 79% to 157% in
1996 and from 80% to 161% in 1995,  (2) risk-free  interest  rates from 5.12% to
6.37% in 1996 and 5.37% to 7.75% in 1995,  and (3) expected lives ranging from 1
to 4.25 years in 1996 and 1.25 to 5.3 years in 1995.

The  following  is a summary of stock option  activity  for 1994,  1995 and 1996
(share amounts are in thousands):
Weighted Average
Prior Service Plan                                     Shares      Exercise Price
-------------------                                    ------      -----------------
Outstanding at January 1, 1994                            -           $  -  
Granted                                                 4,318          1.03
                                                        -----
Outstanding and exercisable at December 31, 1994        4,318          1.03
Forfeited                                                 (50)         1.03
                                                        -----     
Outstanding and exercisable at December 31, 1995        4,268          1.03
Exercised                                                (532)         1.03
Forfeited                                                (117)         1.03
                                                        ----- 
Outstanding and exercisable at December 31, 1996        3,619          1.03
                                                        =====
Weighted average remaining contract life:             2 years
Range of exercise price:                          $0.50  to $4.63
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994
7.   SHAREHOLDERS' EQUITY (continued)
     Stock Option Plans (continued)
Weighted Average
DOC Plan:                                              Shares      Exercise Price
-------------------                                    ------      -----------------
Outstanding at January 1, 1994                           -             $    -
Granted                                                  905               1.87
                                                       ----- 
Outstanding and exercisable at December 31, 1994         905               1.87
Granted                                                5,301               0.50
Exercised                                               (105)              1.06
Forfeited                                               (623)              1.90
                                                       ----- 
Outstanding and exercisable at December 31, 1995       5,478               1.18
Exercised                                                (78)              1.18
Forfeited                                               (197)              1.18
                                                       ----- 
Outstanding and exercisable at December 31, 1996       5,203               1.18
                                                       =====
Weighted average remaining contract life:  2.6 years
   Range of exercise price:  $0.25 to $1.50
   The weighted average fair value of options granted during 1995 was $0.86 
   per share.
Weighted Average
1995 Incentive Plan:                                   Shares      Exercise Price
-------------------                                    ------      -----------------
Outstanding at January 1, 1996                            -           $  -
Granted                                                  397            1.41
Forfeited                                                (71)           1.80
                                                        ----
Outstanding and exercisable at December 31, 1996         326            1.33
                                                        ====
Weighted average remaining contract life:  1.49 years
   Range of exercise price:  $0.81 to $1.80
   The weighted average fair value of options granted during 1996 was $0.64.
Weighted Average
1993 Employees' Plan:                                  Shares      Exercise Price
--------------------                                   ------      -----------------
Outstanding at January 1, 1994                             -           $ -
Granted                                                   702            1.18
Forfeited                                                (180)           1.18
                                                        ----- 
Outstanding and exercisable at December 31, 1994          522            1.18
Granted                                                   957            1.14
Forfeited                                                (355)           1.07
                                                        ----- 
Outstanding and exercisable at December 31, 1995        1,124            1.18
Exercised                                                 (10)           1.18
Forfeited                                                 (56)           1.18
                                                        ----- 
Outstanding and exercisable at December 31, 1996        1,058            1.18
                                                        =====
Weighted average remaining contract life:  2.38 years
 Range of exercise price:  $.50 to $1.50
 The weighted average fair value of options granted during 1995 was $0.51.
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

7.   SHAREHOLDERS' EQUITY (continued)

     Stock Option Plans (continued)
Weighted Average
Miscellaneous Options:                                Shares      Exercise Price
-----------------------                                ------      -----------------
Outstanding at January 1, 1994                           645            $0.58
Granted                                                1,645             0.64
Exercised                                               (600)            0.01
Forfeited                                               (700)            1.13
                                                       -----
Outstanding at December 31, 1994                         990             0.64
Granted                                                4,928             0.91
Forfeited                                               (123)            0.60
                                                       -----
Outstanding at December 31, 1995                       5,795             0.87
Granted                                                3,052             0.84
Exercised                                             (1,024)            0.87
Forfeited                                                (29)            0.87
                                                       -----
Outstanding at December 31, 1996                       7,794             0.90
                                                       =====
Weighted average remaining contract life:    2.44 years
   Range of exercise price:  $0.35 to $2.43

     At  December  31,  1995 and 1996,  5,765,694  and  7,310,779  options  were
exercisable,  respectively.  The weighted  average fair value of options granted
during 1995 and 1996 was $0.97 and $0.47 per share, respectively.

     At December 31,  1996, a total of  17,516,000  options are  exercisable  at
exercise  prices  ranging from $.25 to $4.63 per share.  At December 31, 1996, a
total of  21,747,569  shares of the  Company's  common  stock were  reserved for
options, warrants and contingencies.

     Total  compensation  costs recognized for  stock-option  awards amounted to
$621,013  and  $2,567,527  for the  years  ended  December  31,  1996 and  1995,
respectively.
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

7.   SHAREHOLDERS' EQUITY (continued)

     Stock Option Plans (continued)

     During August 1994, the Company's Board of Directors authorized a reduction
of the exercise price covering 6,760,000  outstanding options to purchase common
stock to  $1.25  per  share  (the  fair  market  value at the date of the  Board
action).  The substantial  majority of such options were previously issued at an
exercise price of $2.56 per share.

     During May 1995, the Company's Board of Directors authorized a reduction of
the exercise price of 4,184,500  outstanding options to purchase common stock to
$.50 per share ($.22  higher than the fair market value at the date of the Board
action).  The substantial  majority of such options were previously issued at an
exercise price of $1.25 per share.

8.   INCOME TAXES

     The tax effects of  temporary  differences  which give rise to deferred tax
assets and  liabilities  at December 31, 1996 and 1995 are summarized as follows
(in thousands):
December 31,
                                                   -------------------
Deferred tax assets                                1996           1995
                                                   ----           ----
Net operating loss carryforwards                $ 17,445      $ 11,578
Tax credit carryforward                              504           641
Compensation                                       4,282         2,390
Fixed and intangible assets                          388         1,763
Other                                                814         1,112
                                                ---------     --------        
                                                  23,433        17,484

Deferred tax liabilities
  Capitalized software development costs            (398)       (1,097)
                                                --------       -------  
                                                  23,035        16,387
Valuation allowance                              (23,035)      (16,387)
                                                --------       -------
                                                 $     0       $     0
                                                ========       ========
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

8.   INCOME TAXES (continued)

     SFAS 109  requires a valuation  allowance  against  deferred tax assets if,
based on the weight of available evidence,  it is more likely than not that some
or all of the  deferred  tax  assets  may not be  realized.  The full  valuation
allowances at December 31, 1996 and 1995 reflect  uncertainties  with respect to
future realization of net operating loss carryforwards.

     At December  31, 1996,  the Company has net  operating  loss  carryforwards
approximating  $41,000,000  available to reduce  future  taxable  income.  These
losses, which expire through 2011, are subject to limitations as a result of IRC
Section 382 rules governing  changes in control.  The Company has not quantified
the amount of such limitations.

9.   UNUSUAL CHARGES

     Included  in unusual  charges for the year ended  December  31,  1996,  are
charges aggregating  $2,590,000  including the following:  $2,075,000,  of which
$2,000,000  (representing  2,614,000  shares of the  Company's  common stock) is
non-cash,  for costs associated with the settlement of certain  litigation (Note
11),  and  $515,000  of  which  $415,000  (representing  750,000  shares  of the
Company's  common  stock) is non-cash  relating to the final  settlement  of SPC
(Note 3).

     Included  in unusual  charges for the year ended  December  31,  1995,  are
charges aggregating  $1,102,000 including the following:  Penalty Amounts to SPC
of $638,000  (Note 3) and  settlement  of certain  litigation  of  approximately
$464,000 (Note 11).

     Included  in unusual  charges for the year ended  December  31,  1994,  are
charges aggregating  $3,178,000  including the following:  write-off of goodwill
relating  to Computer  Concepts  Europe Ltd.  ("CCEL")  of  $1,800,000.  Penalty
Amounts to SPC of $560,000,  write-off of aborted  acquisition costs of $260,000
and the reversal of revenue pertaining to CCEL of $500,000.
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

 10.   RELATED PARTY AND OTHER TRANSACTIONS

     For the years ended December 31, 1996 and 1995,  executive  officers of the
Company  received  stock-based  compensation  aggregating  $899,000  in 1996 and
$168,000 in 1995. One of these  officers has not received any cash  compensation
during 1996,  nor, at any time since the  Company's  inception.

     Two executive  officers of the Company have received  advances from time to
time,  with such  advances  being  payable  upon demand and bearing no interest.
Effective January 1, 1997, these advances are interest bearing at the rate of 7%
per annum.

     During the fourth quarter, the Company advanced  approximately  $126,000 to
another  officer.  The advance was  settled  with the Company  prior to the year
ended  December 31, 1996,  through the transfer of marketable  securities to the
Company with a market value of $126,000.

     During the years  ended  December  31, 1996 and 1995,  the Company  paid an
outside  Director  fees for legal  services  aggregating  $127,000  and  $64,000
respectively.

     During the years  ended  December  31, 1996 and 1995,  the Company  paid an
outside Director consulting fees of $52,000 and $30,000, respectively.

11. COMMITMENTS AND CONTINGENCIES

     Commission/Royalty Commitments

     As  described  in  Note 7 the  Company  is  obligated  to pay  Perot  a 30%
commission  on  gross  revenue  from  the  sale or  license  of the  d.b.Express
technology from sources  generated  solely by Perot or a 10% commission on gross
revenue  from  sources  not  generated   directly  by  Perot,  but  where  Perot
participates  substantially in the sale or license process.  In August 1997, the
Company gave notice to  terminate  the contract  with Perot  effective  December
1997.  Additionally,  the Company is  obligated to pay a consultant a royalty of
20% on net sales or license revenue  specifically  generated by that consultant.
The Company is further  obligated to pay to another  consultant a 10% royalty on
net sales or license revenues specifically generated by that consultant.

     Leases

     The   Company   leases   certain   computer   equipment   under   long-term
non-cancelable leases which are classified as capital leases and are included as
part of property and equipment. Operating leases are primarily for office space,
equipment and automobiles.

     At December 31, 1996, the future minimum lease payments under operating and
capital leases are summarized as follows:
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

11. COMMITMENTS AND CONTINGENCIES (continued)

    Leases (continued)
Year ending December 31,        Operating Leases           Capital Leases
1997                         $ 936,000                 $ 120,000
           1998                           758,000                    62,000
           1999                           645,000                      -
           2000                           521,000                      -
           2001                           275,000                      -
                                       ----------                 ---------
                                        3,135,000                   182,000
  Amounts representing interest              -                       11,000
                                       ----------                 ---------      
  Net                                  $3,135,000                 $ 193,000
                                       ==========                 =========
Rent expense approximated  $690,000,  $619,000 and $437,000,  for the years
ended December 31, 1996, 1995 and 1994, respectively.

     Employment Agreements

     The Company has entered into various  employment  agreements with three key
employees for base compensation  aggregating $400,000 per year. These agreements
expire at various times during 1996 and 1997 and will be  automatically  renewed
for  succeeding  terms of one year unless the Company,  or the  employee,  gives
written notice.

     Benefit Plan

     The Company  provides  pension  benefits to  eligible  employees  through a
401(k) plan.  Employer  matching  contributions to this 401(k) plan approximated
$36,000 for the year ended  December  31, 1996 and $26,000 for each of the years
ended December 31, 1995 and 1994.

     Registration Statements/Restricted Securities

     The Company has used  restricted  common  stock for the purchase of certain
companies (Note 3) and has sold restricted  common stock in private  placements.
At December 31, 1996,  11,716,000  shares of restricted common stock were issued
and outstanding.

     Legal Matters

     During May 1994,  the Company and certain  officers  received  notification
that they have been named as defendants in a class action alleging violations of
certain securities laws with respect to disclosures made regarding the Company's
acquisition  of Softworks  during 1993. On September 12, 1996, the settlement of
this class  action  claim was  approved  by the United  States  District  Court,
Eastern  District of New York. The Company  recorded a charge to earnings in the
first  quarter of 1996 of $2,075,000  to reflect this  settlement  consisting of
$75,000 plus 2,614,000 shares of the Company's common stock.
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

11. COMMITMENTS AND CONTINGENCIES (continued)

    Legal Matters (continued)

     In September 1994, the Company received notice of an action alleging breach
of contract regarding an acquisition  transaction initiated during 1993. In July
1995, a settlement agreement was reached whereby the Company was required to pay
$75,000  and agreed to an  amendment  of the  original  contract  to acquire the
license for additional software.  Pursuant to such amendment, the Company issued
a non-interest  bearing  promissory note in the amount of $388,800 payable in 36
monthly  installments,  with the final payment  scheduled for September 1, 1998,
which  amount  was  recorded  as an  unusual  charge  in the  1995  consolidated
statement of operations.

     In July 1995, the Company received notice of an action alleging the Company
had not used its best efforts to register warrants to purchase 500,000 shares of
the  Company's  common stock within 30 days from written  notice to the Company,
pursuant to a financial consulting agreement. The Company has maintained that it
has always used its best efforts to cause the  registration of those warrants to
occur.   However,  to  avoid  the  expense  and  resolve  the  uncertainties  of
litigation,  the  matter  was  settled  by  including  385,000  warrants  in the
Company's  then  pending  registration  statement,  with the  balance of 115,000
warrants being  canceled.  As the  registration  statement  became  effective on
August 9, 1996, the Company believes this matter has been resolved; however, the
Company is unable to predict the ultimate outcome of this suit and, accordingly,
no adjustment  has been made in the  consolidated  financial  statements for any
potential losses.

     In July 1995, the Company and certain officers  received  notification that
they  have  been  named as  defendants  in a class  action  claim in  regard  to
announcements  and  statements  regarding the  Company's  business and products.
During August and September  1995,  four  additional,  substantially  identical,
class  action  claims were made.  In November  1995,  the five  complaints  were
consolidated  into one action.  Plaintiffs  have moved to certify a Class Action
and the Company did not oppose the motion.  No damages  have been  specified in
any of these class action claims.  Based on consultation with legal counsel, the
Company and its officers believe that  meritorious  defenses exist regarding the
claims and they are vigorously defending against the allegations. The Company is
unable to predict  the  ultimate  outcome of these  claims,  which  could have a
material  adverse impact on the consolidated  financial  position and results of
operations of the Company, and, accordingly, no adjustment has been made for any
potential losses.  See Note 12 - "Subsequent events" for updated information.

     On June 11,  1996,  the  Company  received  notice  of  entry of a  default
judgement  against it for  $1,500,000  and  specific  performance  to effect the
registration  of common stock held by Merit  Technology,  Inc. in a matter which
the Company had not been served or  received  notice (In Re:  Merit  Technology,
Inc., Debtor, U.S.  Bankruptcy Court,  Eastern District of Texas). On August 13,
1996, the default  judgement was set aside by the Court.  During  December 1996,
this matter was settled with the Company  issuing  100,000  shares of its common
stock.

     During  March  1997,  the Company  received a  Complaint  filed in the U.S.
District Court for the Western District of Texas, by Dell Computer  Corporation.
A Second Amended Complaint alleges that the Company failed to deliver product as
contracted  for and  further  alleges  damages in excess of  $850,000.  Based on
consultation  with legal  counsel,  the Company and its  officers  believe  that
meritorious  defenses  exist  regarding  the  claims  and  they  are  vigorously
defending against the allegations. The Company is unable to predict the ultimate
outcome of this claim,  which could have an adverse  impact on the  consolidated
financial position and results of operations of the Company, and accordingly, no
adjustment has been made for any potential losses.
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

11. COMMITMENTS AND CONTINGENCIES (continued)

    Legal Matters (continued)

     In March 1995, an action was originally commenced against the Company and a
number of defendants.  In early 1997,  after a change in counsel,  the plaintiff
amended the  complaint  for a second  time,  now naming as  defendants  only the
Company and three of its officers.  The second  amended  complaint  alleges that
certain  third  parties,  unrelated  to the  Company,  transferred  certificates
representing  10,000,000  shares of the Company's common stock to the plaintiff.
The  complaint  further  alleges that such shares were  endorsed in blank by the
third  parties  and  became  bearer  securities  which  were  negotiated  to the
plaintiff by physical  delivery.  The certificates had not been legally acquired
from the Company  and the  certificates  were  reported  to the  Securities  and
Exchange  Commission  by the  Company  as  stolen  certificates.  Plaintiff  has
requested  validation of the transfer of the certificates and is seeking damages
of an unspecified  amount,  consisting of alleged  diminution in market value of
the subject shares from 1994 through the date of any judgment in the plaintiff's
favor.  The  Company  and its  officers  believe  that  the  Company's  position
regarding the claim has substantial factual and legal support and are vigorously
defending  the matter.  However,  the Company is unable to predict the  ultimate
outcome of this claim and,  accordingly,  no  adjustments  have been made in the
consolidated financial statements for any potential losses or potential issuance
of common stock.

12. SUBSEQUENT EVENTS

     The Company's  financial  statements for the three years ended December 31,
1996 were  originally  issued by the Company on May 6, 1997 and were included in
the Company's  annual report on Form 10-K for the year ended  December 31, 1996.
These  financial  statements  are currently  being  reissued  and,  accordingly,
significant  events  occurring after May 6, 1997 are required to be disclosed in
these consolidated financial statements.

     Sales of Convertible Debentures and Common Stock

     As  discussed  in Note 1, in May 1997,  the  Company  was in the process of
negotiating the sale of convertible securities in order to sustain the Company's
operations.  Subsequently,  the Company received approximately  $3,865,000 (less
commissions  and fees of  approximately  $484,000)  from the sale of convertible
debentures, and $3,000,000 (less commissions and fees of $240,000) from the sale
of common stock.
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

12. SUBSEQUENT EVENTS (continued)

     Sales of Convertible Debentures and Common Stock (continued)

Convertible  debentures.  During the quarter  ended June 30,  1997,  the Company
raised  approximately  $3,865,000  (less  commissions and fees of  approximately
$484,000) through the sale of non-interest bearing convertible debentures. These
debentures had a maturity date in May, 1998, and were convertible, at the option
of the holder,  commencing 45 days from the date of issue into restricted common
stock of the Company. The convertible  debentures had an assured discount of 25%
from the prices of the Company's  common stock at various  defined  periods.  In
connection  with this  discount,  SEC Staff  comments  and  consistent  with SEC
observer  comments at the Emerging  Issues Task Force  meeting on March 13, 1997
related to this topic,  the Company recorded a deferred asset of $1,288,000 upon
the  receipt of the funds and  amortized  this  discount  amount over the period
commencing  on the date the  security  was  issued  to the date it first  became
convertible.  Accordingly,  the  Company  recorded  a non-cash  interest  charge
related to these  securities of $1,288,000.  During the quarter ended  September
30, 1997, the entire amount of the debentures,  $3,865,000 had converted into an
aggregate  of  11,982,343   shares  of  the  Company's  common  stock  and  has,
accordingly, increased the Company's shareholders' equity by an equal amount.

Common  stock.  During  the  quarter  ended  September  30,  1997,  the  Company
consummated  a sale of  restricted  common  stock under a private  placement  to
accredited  United States  investors under Regulation D. Proceeds from this sale
were  $3,000,000   (less   commissions  and  fees  of  $240,000).   A  total  of
approximately  4,615,000  shares  were  sold  at a price  of  $0.65  per  share.
Additional  shares may be  required to be issued  under a  valuation  guarantee
should the closing bid price of the  Company's  common  stock,  as stated on the
Nasdaq SmallCap Market, not exceed an average of $0.78 for any five consecutive
trading days during the thirty days immediately  following the effective date of
a Registration Statement.

     While the proceeds from the sales of the convertible  debentures and common
stock  satisfied  the  Company's  immediate  cash needs,  further  financing (or
positive  cash  flows  from  operations)  will be  required  in order to sustain
operations in the near term.

     Sale of MapLinx

     As  discussed  in Note 3, in May 1997,  the  Company  was in the process of
attempting  to sell the net assets of  MapLinx  and in July  1997,  the  Company
completed a transaction in which it sold all rights to the  underlying  software
technologies  of MapLinx.  further,  as part of the  transaction,  the purchaser
acquired all of MapLinx' current assets and assumed all of its liabilities.  The
sale price of  approximately  $850,000 was  adjusted  (reduced) by the excess of
MapLinx'  current  liabilities  over current  assets  (approximately  $380,000),
resulting in a net sales price of $470,000.  Approximately  $235,000 was paid at
closing,  the balance of $235,000  plus interest is due six months from closing.
As a result,  the Company  recognized  an  $813,000  gain on the sale of the net
assets of MapLinx in the quarter ended September 30, 1997.
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

12. SUBSEQUENT EVENTS (continued)

     Settlement of Class Action Claim

     As discussed in Note 11, in May 1997, the Company was unable to predict the
ultimate  outcome of the class  action  claim which  originated  in July,  1995.
However,  in July 1997,  in an effort to avoid the  expense of and  resolve  the
uncertainty of litigation,  the Company  tentatively agreed to a Stipulation and
Agreement of  Settlement  of this class action  ("Stipulation  Agreement").  The
Company  continues to deny any wrongdoing  with respect to this action and seeks
to settle to avoid further  substantial  expense,  inconvenience  and risk.  the
plaintiff's counsel is presently providing notice of the action and the proposed
settlement to the class members. A hearing is scheduled to be heard by the Court
on December 12, 1997  ("Settlement  Hearing")  at which time it is  contemplated
that the Court will enter a final order  approving  the  following  terms of the
settlement.  If  approved,  the  Company  will  deliver  and place  into  escrow
1,000,000  shares of its common stock. In the event that the average closing bid
price of the  Company's  common  stock  for the ten  trading  days  prior to the
Settlement  Hearing  is less than  $0.50  per  share,  the  Company  will  issue
additional  shares,  determined by dividing $500,000 by the ten day average less
the shares  already placed into escrow.  Further,  the Company and its insurance
carrier will each deposit into escrow $350,000,  totaling  $700,000.  Based upon
the Stipulation  Agreement,  the Company has recorded an $850,000 unusual charge
to earnings in the quarter ended June 30, 1997.

     Shareholder's equity

     During  the nine  month  period  ended  September  30,  1997,  the  Company
consummated  sales of 85,250 shares of common stock  resulting from the exercise
of stock options. Proceeds raised from these sales aggregated $23,000.

     During the nine month period ended  September 30, 1997,  the Company issued
6,945,000   shares  of  common   stock,   6,145,000  of  which  are  subject  to
registration,  to officers,  employees and outside consultants. The shares had a
fair value (adjusted for the value of 2,000,000 canceled options) on the date of
issuance of approximately  $2,477,000 and,  accordingly,  the Company recorded a
non-cash compensation charge of approximately $2,477,000.  further, 2,500,000 of
these shares are subject to forfeiture based upon specified Company  performance
criteria. Additionally, for the nine months ended September 30, 1997, in lieu of
cash compensation to various officers,  employees and consultants, the Company's
Board of Directors  authorized  a reduction  of the exercise  price of 3,915,000
outstanding  options to purchase the  Company's  common stock to prices  ranging
from  $0.01 to $1.00 per share.  The  options  originally  had  exercise  prices
ranging  from  $0.50 to $1.50  per  share.  Accordingly,  the  Company  recorded
non-cash   charges  of  approximately   $1,271,000  for  employee   compensation
(calculated  using the intrinsic  method) and  consulting  services  (calculated
using the fair value method). The Company also recorded a non-cash  compensation
charge of $18,000  for  options  granted to two key  employees  as part of their
employment contract agreements.
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1996, 1995 and 1994

12. SUBSEQUENT EVENTS (continued)

     Shareholder's equity (continued)

     During October,  1997, the Company issued  1,147,652  restricted  shares of
common stock to HPS America,  Inc. ("HPS") for settlement of product development
costs aggregating $860,739 owed to HPS and its affiliates. Additional shares may
be required to be issued  should the net proceeds  from the sale of these shares
not equal  $0.75 per  share.  In the event  the net  proceeds  exceed  the gross
valuation  amount,  $860,739,  then the  Company  shall be  entitled to either a
credit to be applied against  potential future HPS invoices or the return to the
Company of 75% of the excess  proceeds  (as  determined  by the per share  sales
price in excess of $0.75).

     At the Company's  annual  shareholders'  meeting on November 26, 1997,  the
Company's  shareholders  passed a  resolution  to grant the  Board of  Directors
authority to amend the Certificate of  Incorporation  to increase the authorized
shares of common  stock  from  150,000,000  to  300,000,000.  Additionally,  the
shareholders granted the Board of Directors authority to effect a reverse stock
split in a ratio  ranging from  one-for-two  through  one-for-ten.  The Board of
Directors has not caused either of these  alternatives to become effective,  nor
do they have any present plans to do so.

     Software Distribution Agreement

     In July 1997,  the Company  acquired from  Cognizant  Technology  Solutions
Corporation  ("CTS")  the rights to two  technologies  (the  "Technology")  that
complement the Company's existing Year 2000 product  solutions.  Pursuant to the
software distribution  agreement, in exchange for the Technology rights, the
Company is required to pay CTS a royalty on sales of the  Technology  at defined
rates subject to minimum annual royalties as follows: $100,000 in 1997, $900,000
in 1998, $1,400,000 in 1999 and $400,000 in 2000.
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                                      INDEX
PART I -  FINANCIAL INFORMATION                               Page
Condensed Consolidated Balance Sheets
  as of September 30, 1997 and December 31, 1996                1

  Condensed Consolidated Statements of Operations
  For the Three and Nine Months Ended September 30, 
  1997 and 1996                                                 2

  Condensed Consolidated Statements of Cash Flows
  For the Nine Months Ended September 30, 1997 and 1996         3

  Notes to Condensed Consolidated Financial Statements          4 - 8

  Management s Discussion and Analysis of Financial
  Condition and Results of Operations                           9 - 12

PART II - OTHER INFORMATION

  Item 1. Legal Proceedings                                     13
  Item 2. Changes in Securities                                 13
  Item 3. Defaults Upon Senior Securities                       13
  Item 4. Submission of Matters to a Vote of Security Holders   13
  Item 5. Other Information                                     13
  Item 6. Exhibits and Reports on Form 8-K                      13
  Signatures                                                    14
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                 as of September 30, 1997 and December 31, 1996
                        (in thousands, except share data)
September 30,        December 31,
                 ASSETS                     1997                 1996
                                            ----                 ---- 
                                         (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents               $ 3,600              $ 5,675
  Accounts receivable, net of 
    allowance for doubtful 
    accounts of $350 and $693 in 
    1997 and 1996, respectively            13,065                9,044
  Advances to  officers                       861                  682
  Inventories                                  -                    29
  Prepaid expenses and other 
     current assets                         1,395                1,036
                                           ------               ------   
      Total current assets                 18,921               16,466

INSTALLMENT ACCOUNTS RECEIVABLE, 
     due after one year                     6,980                3,714

PROPERTY AND EQUIPMENT, net                 2,059                1,605

SOFTWARE COSTS,  net                          993                  949

EXCESS OF COST OVER FAIR VALUE OF 
    NET ASSETS ACQUIRED, net of
    accumulated amortization  
    of $2,279  and $2,628 in 
    1997 and 1996, respectively             4,614                4,683

OTHER ASSETS                                  170                  254
                                         --------             --------
                                         $ 33,737             $ 27,671
                                         ========             ========
 
                       LIABILITIES AND SHAREHOLDERS EQUITY

CURRENT LIABILITIES:
   Accounts payable and accrued 
     expenses                            $ 5,936              $  4,227
   Current portion of long- term debt        453                   458
   Deferred revenues                      11,198                 8,972
                                         -------               ------- 
     Total current liabilities            17,587                13,657

DEFERRED REVENUES                          7,373                 3,964

LONG-TERM DEBT                               280                   526

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS  EQUITY:
   Common stock, $.0001 par value; 
   150,000,000 shares authorized; 
   125,535,000 shares in 1997 
   and 101,335,000 shares in 1996 
   issued and outstanding                     13                   10

   Additional paid-in capital             90,839               78,870
   Accumulated deficit                   (82,355)             (69,356)
                                        --------             -------- 
     Total shareholders  equity            8,497                9,524
                                        --------             --------
                                        $ 33,737             $ 27,671
                                        ========             ========
See Notes to Condensed Consolidated Financial Statements.
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
              For the Three and Nine Months Ended September 30, 
                      (in thousands, except per share data)
Three Months Ended       Nine Months Ended
                                        September 30,            September 30,
                                
                                     1997         1996         1997        1996
                                     ----         ----         ----        ----
REVENUES:                           $6,657       $4,313      $19,931     $12,144
                                    ------       ------      -------     -------   
COSTS AND EXPENSES:
  Cost of revenues and 
     technical support               1,825        1,354        7,046       3,971
  Research and development           1,254          328        2,905       1,004
  Sales and marketing                5,744        2,539       12,821       6,913
  General and administrative         2,413        1,621        7,119       5,115
  Amortization and depreciation        606          798        1,714       2,340
  Unusual charges                       -            -           850       2,075
                                    ------       ------       ------      ------  
                                    11,842        6,640       32,455      21,418
                                    ------       ------       ------      ------

LOSS FROM OPERATIONS                (5,185)      (2,327)     (12,524)     (9,274)

OTHER INCOME/(EXPENSE):
  Gain on sale of net assets  
     of subsidiary                     813          -            813         -

   Interest charge pertaining 
     to the discount
     on convertible debentures        (408)        (630)      (1,288)     (2,810)
                                    ------        ------      ------      ------
NET LOSS                           $(4,780)     $(2,957)    $(12,999)   $(12,084)
                                    ======        ------      ======      ======   
NET LOSS PER SHARE                $  (0.04)     $ (0.04)     $ (0.12)    $ (0.18)
                                    ======        ======      ======      ======   

WEIGHTED AVERAGE COMMON SHARES  
     OUTSTANDING                   117,451       73,982      106,897      66,052
                                   =======       ======      =======     =======
See Notes to Condensed Consolidated Financial Statements.
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                     For the Nine Months Ended September 30,
                                 (in thousands)
1997                   1996
OPERATING ACTIVITIES:  
Net loss                            $(12,999)             $(12,084)
Adjustments to reconcile 
   net loss to net cash used in 
   operating activities: 
 Depreciation and amortization:
   Software costs                        480                 1,090
   Property and equipment                679                   531
   Excess of cost over fair 
     value of net assets acquired        552                   712
   Other                                   3                     7
   Common stock and options issued 
     for services                      3,766                   787
   Gain on sale of net assets of 
     subsidiary                         (813)                   -
   Non-cash interest charge  
     pertaining to the discount on
     convertible debentures            1,288                 2,810      
   Non-cash unusual charges              500                 2,000
   Bad debts                              61                    -
Changes in operating assets and 
     liabilities:
     Accounts receivable              (4,235)               (1,455)
     Installment accounts receivable, 
       due after one year             (3,266)               (1,789)
     Inventories                          10                    47
     Prepaid expenses and other 
       current assets                   (134)                 (658)
     Other assets                         81                  (313)
     Deferred revenues                 5,653                 3,381
    Accounts payable and 
       other accrued expenses          2,502                   599
                                      ------                ------  
       Net cash used in operating 
          activities                  (5,872)               (4,335)
                                      ------                ------  
INVESTING ACTIVITIES:
     Capital expenditures             (1,164)                 (533)
     Additional consideration 
          for Softworks acquisition     (486)                 (368)
     Proceeds from the sale of 
          technology                     -                     350
     Proceeds from the sale of 
          net assets of subsidiary       230                    -
     Capitalization of software 
          development costs             (525)                 (332)
     Net change in advances to 
          officers                      (179)                 (185)
                                      ------                ------  
       Net cash used in investing 
          activities                  (2,124)               (1,068)
                                      ------                ------
FINANCING ACTIVITIES:
    Net proceeds from sales of 
          common stock, options  
          and convertible 
          debentures                   6,164                11,976
    Net change in long-term debt        (243)                 (233)
                                      ------                ------  
       Net cash provided by 
          financing activities         5,921                11,743
                                      ------                ------  
DECREASE (INCREASE)  IN CASH 
    AND CASH EQUIVALENTS              (2,075)                6,340
CASH AND CASH EQUIVALENTS, 
    beginning of period                5,675                   579
                                      ------                ------  
CASH AND CASH EQUIVALENTS, 
    end of period                     $3,600                $6,919
                                      ======                ======  

            See Notes to Condensed Consolidated Financial Statements
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
         For the Three and Nine Months Ended September 30, 1997 and 1996

       1.   INTERIM  FINANCIAL INFORMATION

     The condensed  consolidated balance sheet as of September 30, 1997, and the
condensed  consolidated  statements of operations  for the three and nine months
ended  September  30, 1997,  and 1996,  and cash flows for the nine months ended
September 30, 1997, and 1996,  have been prepared by the Company  without audit.
These interim financial  statements include all adjustments,  consisting only of
normal  recurring  accruals,  which  management  considers  necessary for a fair
presentation of the financial  statements for the above periods.  The results of
operations  for the three and nine months  ended  September  30,  1997,  are not
necessarily  indicative  of results that may be expected  for any other  interim
periods or for the full year.

     These  condensed  consolidated  financial  statements  should  be  read  in
conjunction with the consolidated financial statements and notes thereto for the
year ended  December 31, 1996.  The  accounting  policies  used in preparing the
condensed  consolidated financial statements are consistent with those described
in the December 31, 1996, consolidated financial statements.

       2.   BASIS OF PRESENTATION

     Computer Concepts Corp. and subsidiaries (the "Company")  design,  develop,
market and support  information  delivery software products,  including end-user
data access tools for use in personal computer and  client/server  environments,
and systems management  software products for corporate  mainframe data centers.
The Company has  recently  entered  into the  Information  Services / technology
infrastructure  service business.  The Company's  principal market is the United
States.  Overseas revenues are principally  generated from European subsidiaries
and distributors.

     The Company has  incurred  consolidated  net losses of  $4,780,000  for the
three months ended  September  30, 1997,  $12,999,000  for the nine months ended
September 30, 1997, and cumulative net losses of $82,355,000  through  September
30,  1997.  Further,  the  Company  has  incurred  consolidated  net  losses  of
$18,953,000,  $18,365,000  and  $12,207,000  during the years ended December 31,
1996,  1995, and 1994,  respectively.  For the nine month period ended September
30, 1997, net cash used in operating  activities was $5,872,000,  reflecting the
above net loss being offset by various  non-cash items and changes in assets and
liabilities described in the accompanying  condensed  consolidated  statement of
cash flows.  The Company's cash  requirements  were primarily  financed  through
current and prior year sales of  convertible  debentures,  sales of common stock
and funds generated from Softworks' operations.

     The  Company  does not  maintain  a  credit  facility  with  any  financial
institution.  The Company  has  continued  to incur  significant  expenses  with
respect to the development and marketing of its d.b.Express  product  technology
without generating any significant  revenues. As a result of continued operating
losses,  the use of  significant  cash in operations  and the lack of sufficient
funds to execute its business plan,  among other  matters,  there is substantial
doubt about the Company's ability to continue as a going concern. No adjustments
have been made with respect to the condensed  consolidated  financial statements
to record the results of the ultimate outcome of this uncertainty.

     Management's  plans to remain a going concern,  as more fully  described in
these notes,  require  additional  financing  until such time as sufficient cash
flows are generated from operations.  During the nine months ended September 30,
1997, the Company received  approximately  $3,865,000 (less commissions and fees
of  approximately  $484,000)  from  the  sale  of  convertible  debentures,  and
$3,000,000  (less  commissions  and fees of  $240,000)  from the sale of  common
stock. See Note 3.a. to the condensed consolidated financial statements.
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
   (Unaudited) For the Three and Nine Months Ended September 30, 1997 and 1996

       2.   BASIS OF PRESENTATION (Continued)

     There  can be no  assurances  that  the  Company  will be  able  to  obtain
sufficient  financing to execute its business plan. The Company's primary source
of revenue continues to be derived from its Softworks  subsidiary.  Management's
plans to remain a going  concern rely upon  achieving  positive  cash flows from
operations  through  the  continued  growth  of  Softworks  and  the  successful
exploitation of the Company's d.b.Express product.  While to date, revenues from
d.b.Express have been  insignificant,  management  believes that its proprietary
software  technology  has  significant  potential in several  areas,  and solves
certain  significant  business  issues in the  telecommunications  and  internet
related markets.  In order to realize the potential of this product,  management
will need to  aggressively  pursue all  marketing  opportunities.  To date,  the
Company  has  incurred  significant  losses  (both cash  expenses  and  non-cash
expenses) as a result of the development and marketing of d.b.Express. There can
be no assurances that the Company will be successful in achieving  positive cash
flows from  operations  with  respect to the  d.b.Express  product.  The Company
continues to pursue license and development  agreements with various  companies.
While none of the Company's  existing  agreements or development  opportunities,
that relate to d.b.Express, provide sales commitments,  management believes that
the  successful  exploitation  of its  d.b.Express  technology,  as  well as the
continued  growth of Softworks,  will  eventually  enable the Company to achieve
positive  cash  flows  from  operations.   Unless  the  Company   determines  to
discontinue  its pursuit of d.b.Express  revenues  (which  requires  significant
financial resources), the Company will need to generate positive cash flows from
operations  from the sale of  d.b.Express  product  in  order  to  decrease  its
dependency on cash flows from  financing  activities and remain a going concern.
At November 10, 1997, the Company had cash and cash equivalents of approximately
$1,674,000.  Ultimately,  however,  positive cash flows from  operations will be
necessary in order to curtail the Company's reliance on equity placements.

       3.   SHAREHOLDERS' EQUITY

     a. Sales of Common Stock and Convertible Debentures

     During the quarter ended June 30, 1997,  the Company  raised  approximately
$3,865,000  (less  commissions and fees of approximately  $484,000)  through the
sale of non-interest  bearing  convertible  debentures.  These  debentures had a
maturity date in May, 1998, and were  convertible,  at the option of the holder,
commencing  45 days from the date of issue into  restricted  common stock of the
Company.  The  convertible  debentures  had an assured  discount of 25% from the
prices of the Company's common stock at various defined  periods.  In connection
with this discount, SEC Staff comments and consistent with SEC observer comments
at the  Emerging  Issues Task Force  meeting on March 13,  1997  related to this
topic,  the Company  recorded a deferred asset of $1,288,000 upon the receipt of
the funds and amortized this discount  amount over the period  commencing on the
date  the  security  was  issued  to  the  date  it  first  became  convertible.
Accordingly,  the Company  recorded a non-cash  interest charge related to these
securities  of  $1,288,000.  During the quarter ended  September  30, 1997,  the
entire amount of the debentures,  $3,865,000, had converted into an aggregate of
11,982,343 shares of the Company's common stock and has, accordingly,  increased
the Company's shareholders' equity by an equal amount.
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)
        For the Three and Nine Months Ended September 30, 1997 and 1996

       3.   SHAREHOLDERS' EQUITY (Continued)

     Additionally,  during the quarter  ended  September  30, 1997,  the Company
consummated  a sale of  restricted  common  stock under a private  placement  to
accredited  United States  investors under Regulation D. Proceeds from this sale
were  $3,000,000   (less   commissions  and  fees  of  $240,000).   A  total  of
approximately  4,615,000  shares  were  sold  at a price  of  $0.65  per  share.
Additional  shares may be  required  to be issued  under a  valuation  guarantee
should the closing bid price of the  Company's  common  stock,  as stated on The
Nasdaq SmallCap Market,  not exceed an average of $0.78 for any five consecutive
trading days during the thirty days immediately  following the effective date of
a Registration Statement.

     During  the nine  month  period  ended  September  30,  1997,  the  Company
consummated  sales of 85,250 shares of common stock  resulting from the exercise
of stock options. Proceeds raised from these sales aggregated $23,000.

     b. Stock Compensation Awards and Repricing of Options

     During the nine month period ended  September 30, 1997,  the Company issued
6,945,400   shares  of  common   stock,   6,145,400  of  which  are  subject  to
registration,  to officers,  employees and outside consultants. The shares had a
fair value (adjusted for the value of 2,000,000 canceled options) on the date of
issuance of approximately  $2,477,000 and,  accordingly,  the Company recorded a
non-cash compensation charge of approximately $2,477,000.  Further, 2,500,000 of
these shares are subject to forfeiture based upon specified Company  performance
criteria. Additionally, for the nine months ended September 30, 1997, in lieu of
cash compensation to various officers,  employees and consultants, the Company's
Board of Directors  authorized  a reduction  of the exercise  price of 3,915,000
outstanding  options to purchase the  Company's  common stock to prices  ranging
from  $0.01 to $1.00 per share.  The  options  originally  had  exercise  prices
ranging  from  $0.50 to $1.50  per  share.  Accordingly,  the  Company  recorded
non-cash   charges  of  approximately   $1,271,000  for  employee   compensation
(calculated  using the intrinsic  method) and  consulting  services  (calculated
using the fair value method). The Company also recorded a non-cash  compensation
charge of $18,000  for  options  granted to two key  employees  as part of their
employment contract agreements.

     c.  Subsequent Event

     During October,  1997, the Company issued  1,147,652  restricted  shares of
common stock to HPS America,  Inc. ("HPS") for settlement of product development
costs aggregating $860,739 owed to HPS and its affiliates. Additional shares may
be required to be issued  should the net proceeds  from the sale of these shares
not equal  $0.75 per  share.  In the event  the net  proceeds  exceed  the gross
valuation  amount,  $860,739,  then the  Company  shall be  entitled to either a
credit to be applied against  potential future HPS invoices or the return to the
Company of 75% of the excess  proceeds  (as  determined  by the per share  sales
price in excess of $.75).
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
         For the Three and Nine Months Ended September 30, 1997 and 1996

     4.  SALE OF NET ASSETS OF SUBSIDIARY

     In July,  1997,  the Company  completed a transaction  in which it sold all
rights to the underlying software  technologies of its Maplinx, Inc. subsidiary.
Further,  as part of the  transaction,  the  purchaser  acquired all of Maplinx'
current  assets  and  assumed  all  of  its  liabilities.  The  sales  price  of
approximately  $850,000 was adjusted (reduced) by the excess of Maplinx' current
liabilities  over current assets  (approximately  $380,000),  resulting in a net
sales price of $470,000. Approximately $235,000 was paid at closing, the balance
of $235,000 plus  interest is due six months from  closing.  As a result of this
transaction, the Company recognized a gain on the sale of net assets of $813,000
in the quarter ended September 30, 1997.

5.  COMMITMENTS AND CONTINGENCIES

a.   Contingent Consideration

     In  connection  with the 1993  acquisition  of  Softworks,  the  Company is
required to make additional  payments to two of Softworks' former  shareholders,
based upon certain  product  revenues for the years 1995 through  1998,  up to a
maximum of $1,000,000  each,  for an aggregate  maximum of  $2,000,000.  Through
September  30,  1997,  the  Company  has  incurred  an  aggregate  liability  of
$1,409,000,  (of which  $1,289,000  has been  paid) to the  non-employee  former
shareholders,  which has been treated as additional  consideration in connection
with the acquisition, and, accordingly,  included in the excess of cost over the
fair value of net assets acquired,  as these individuals did not continue in the
employment of the Company  subsequent to the  acquisition.  No other  contingent
payments have been made under the terms of this agreement.

b.   Registration Statements/Restricted Securities

     The Company has used  restricted  common  stock for the purchase of certain
companies, has sold restricted common stock in private placements and has issued
restricted  common  stock as  compensation  to  employees  and  certain  outside
consultants. At September 30, 1997, 16,168,000 shares of restricted common stock
are issued and outstanding.

c.   Legal Matters

     In July, 1995, the Company and certain officers received  notification that
they  have  been  named as  defendants  in a class  action  claim in  regard  to
announcements  and  statements  regarding the  Company's  business and products.
During August and September,  1995, four  additional,  substantially  identical,
class action  claims were made.  In November,  1995,  the five  complaints  were
consolidated  into one action.  Plaintiffs  have moved to certify a class action
and the Company did not oppose the motion.  In July, 1997, in an effort to avoid
the  expense  of  and  resolve  the  uncertainty  of  litigation,   the  Company
tentatively  agreed to a Stipulation  and Agreement of Settlement  ("Stipulation
Agreement") of this class action.  The Company  continues to deny any wrongdoing
with  respect to this  action and seeks to settle to avoid  further  substantial
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              (Unaudited)
       For the Three and Nine Months Ended September 30, 1997 and 1996

5.   COMMITMENTS AND CONTINGENCIES  (Continued)

expense,  inconvenience and risk. The plaintiff's counsel is presently providing
notice of the action and the proposed settlement to the class members. A hearing
is scheduled for December 12, 1997 ("Settlement  Hearing"),  at which time it is
contemplated  that the Court will enter a final order  approving  the  following
terms of the  settlement.  If approved,  the Company will deliver and place into
escrow  1,000,000  shares of its common  stock.  In the event  that the  average
closing bid price of the  Company's  common stock for the ten trading days prior
to the Settlement  Hearing is less than $0.50 per share,  the Company will issue
additional  shares,  determined by dividing $500,000 by the ten day average less
the shares  already placed into escrow.  Further,  the Company and its insurance
carrier will each deposit into escrow $350,000,  totaling  $700,000.  Based upon
the  Stipulation  Agreement,  the Company had recorded in the quarter ended June
30, 1997, an $850,000 Unusual Charge to earnings.

     d.   Software Distribution Agreement

     In July 1997,  the Company  acquired from  Cognizant  Technology  Solutions
Corporation ("CTS") the generally exclusive worldwide rights to two technologies
(the  "Technology")  that  complement  the Company's  existing Year 2000 product
solutions.  Pursuant to the software distribution agreement, in exchange for the
Technology  rights, the Company is required to pay CTS a royalty on sales of the
Technology  at defined  rates  subject to minimum  annual  royalties as follows:
$100,000 in 1997, $900,000 in 1998, $1,400,000 in 1999 and $400,000 in 2000.
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND
           ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        For the Three and Nine Months Ended September 30, 1997 and 1996

Business Description
--------------------

     Computer Concepts Corp. and subsidiaries (the "Company")  design,  develop,
market and support  information  delivery software products,  including end-user
data access tools for use in personal  computer and  client/server  environments
and systems management  software products for corporate  mainframe data centers.
The Company has  recently  entered  into the  Information  Services / technology
infrastructure  service business.  The Company's  principal market is the United
States.  Overseas revenues are principally  generated from European subsidiaries
and distributors.

     The Company  currently  consists of three operating units or product lines:
d.b.Express,  Softworks,  and a newly formed business unit. d.b.Express provides
businesses  with  a  simple,  fast,  low-cost  method  of  finding,  organizing,
analyzing and using information  contained in databases through a visually-based
proprietary  software  tool.  Softworks  provides  systems  management  software
products  that  optimize   mainframe   system   performance,   reduce   hardware
expenditures,   and  enhance  the  reliability  and  availability  of  the  data
processing environment.  Products marketed by Softworks include technology which
addresses  the year 2000  problem.  During the nine months ended  September  30,
1997, the Company commenced  operations of a new business unit which is designed
to provide a wide array of  information  technology,  support and services.  The
Company has employed an individual,  formerly with I.B.M.,  having  expertise in
this field and intends to capitalize on his  experience  and competency in order
to create a unique,  single  management  infrastructure  to support an extensive
selection of services and vendors.  The  Company's  new business line will offer
solutions,  support,  and  strategies to solve various  business  crises in such
areas as: network determinations,  help desk applications,  wiring/cabling,  LAN
connections,  moves/adds/changes,  and  project  management.  Additionally,  the
Company will oversee new  installations  as well as offering  on-site  component
repair.  The method of revenue  recognition  will be dependent upon the type and
manner of service provided.

Results of Operations
---------------------

Three and Nine Months Ended September 30, 1997 Compared with September 30, 1996
-------------------------------------------------------------------------------

     Revenues for the quarter ended  September  30, 1997,  were  $6,657,000,  an
increase of $2,344,000  over revenues for the quarter ended  September 30, 1996,
while for the nine months ended September 30, 1997, and 1996, revenues increased
$7,787,000 from $12,144,000 to $19,931,000.  For the quarter ended September 30,
1997,  net revenues  increased at Softworks by  $2,816,000,  while  decreases in
revenues of $472,000 resulted primarily from the closure of certain subsidiaries
and product  lines.  Year to date  increases of  $7,138,000  and  $1,432,000  at
Softworks  and  Computer  Concepts  respectively,  were offset by  decreases  of
$783,000  from the  closure of  certain  subsidiaries  and  product  lines.  The
increase  in  revenues  at  Softworks  is due  primarily  to the  release of new
products  and expanded  sales and  marketing  efforts.  The increase at Computer
Concepts  is  principally  due to the  revenues  generated  from its new special
services division.

     The cost of revenues and technical support increased $471,000 to $1,825,000
for the quarter ended  September  30, 1997,  as compared to  $1,354,000  for the
prior year quarter and by  $3,075,000  to  $7,046,000  for the nine months ended
September 30, 1997,  from  $3,971,000 for the prior year nine month period.  The
principal  factors for these increases  include the release of new product lines
and added technical  support for the additional  sales at Softworks at Softworks
as well as the  costs  associated  with the new  special  services  division  at
Computer Concepts.
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

         For the Three and Nine Months Ended September 30, 1997 and 1996

Three and Nine Months Ended  September 30, 1997 Compared with September 30,
1996 (Continued)

     Research and  development  costs  increased  $926,000 to $1,254,000 for the
quarter ended September 30, 1997 from, $328,000 for the prior year quarter,  and
increased $1,901,000 to $2,905,000 for the nine months ended September 30, 1997,
from  $1,004,000  for the prior  year nine month  period.  R&D  activities  were
devoted  to  further  develop  current  product  technologies,  as  well  as the
development of technologies pertaining to the Year 2000 problem.

     Sales and marketing  expenses  increased  approximately  $3,205,000 for the
quarter ended  September 30, 1997, to $5,744,000  from  $2,539,000 for the prior
year.  This  increase is primarily  due to Softworks'  domestic  expansion,  the
creation of additional international  subsidiaries and its efforts to market and
promote Year 2000  technologies.  Additional  expenses incurred were a result of
increased  efforts to market d.b.Express TM.  For the nine month  period  ended
September 30, 1997,  expenses  increased  when compared to the nine months ended
September  30, 1996 by  $5,908,000, primarily due to factors mentioned above.

     General and  administrative  costs increased $792,000 to $2,413,000 for the
three months ended  September  30, 1997,  when  compared to  $1,621,000  for the
quarter ended  September 30, 1996,  and by $2,004,000 to $7,119,000 for the nine
months ended  September  30,1997 from $5,115,000 for the nine month period ended
September 30, 1996. The principal  factors  contributing  to these increases has
been the additional  overhead  costs  associated  with the increased  efforts to
market d.b.Express and technologies associated with the Year 2000 problem, along
with  non-cash  compensation  awards  made to certain  officers,  employees  and
consultants.

     See Note  3.a.  to the  condensed  consolidated  financial  statements  for
discussion  relating to the non-cash  interest charge pertaining to the discount
on convertible debentures.

     See  Note  5.c to  the  condensed  consolidated  financial  statements  for
discussion relating to the unusual charges incurred during the nine months ended
September 30, 1997. For the quarter ended March 31, 1996,  the Company  recorded
an unusual  charge to earnings of  $2,075,000  as a result of a settlement  of a
class action suit.

Financial Condition and Liquidity

     The Company has  incurred  consolidated  net losses of  $4,780,000  for the
three months ended  September  30, 1997,  $12,999,000  for the nine months ended
September 30, 1997, and cumulative net losses of $82,355,000  through  September
30,  1997.  Further,  the  Company  has  incurred  consolidated  net  losses  of
$18,953,000,  $18,365,000  and  $12,207,000  during the years ended December 31,
1996,  1995, and 1994,  respectively.  For the nine month period ended September
30, 1997, net cash used in operating  activities  was $5,872,000  reflecting the
above net loss being offset by various  non-cash items and changes in assets and
liabilities described in the accompanying  condensed  consolidated  statement of
cash flows.  The Company's cash  requirements  were primarily  financed  through
current and prior year sales of  convertible  debentures,  sales of common stock
and funds generated from Softworks' operations.

     The  Company  does not  maintain  a  credit  facility  with  any  financial
institution.  The Company  has  continued  to incur  significant  expenses  with
respect to the development and marketing of its d.b.Express  product  technology
without generating any significant  revenues. As a result of continued operating
losses,  the use of  significant  cash in operations  and the lack of sufficient
funds to execute its business plan,  among other  matters,  there is substantial
doubt about the Company's ability to continue as a going concern. No adjustments
have been made with respect to the condensed  consolidated  financial statements
to record the  results of the  ultimate  outcome of this  uncertainty.
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

         For the Three and Nine Months Ended September 30, 1997 and 1996

Financial Condition and Liquidity (Continued)

     Management's  plans to remain a going concern,  as more fully  described in
these notes,  require  additional  financing  until such time as sufficient cash
flows are generated from operations.  During the nine months ended September 30,
1997, the Company received  approximately  $3,865,000 (less commissions and fees
of $484,000)  from the sale of  convertible  debentures,  and  $3,000,000  (less
commissions  and fees of $240,000) from the sale of common stock.  See Note 3.a.
to the condensed consolidated financial statements.

     There  can be no  assurances  that  the  Company  will be  able  to  obtain
sufficient  financing to execute its business plan. The Company's primary source
of revenue continues to be derived from its Softworks  subsidiary.  Management's
plans to remain a going  concern rely upon  achieving  positive  cash flows from
operations  through  the  continued  growth  of  Softworks  and  the  successful
exploitation of the Company's d.b.Express product.  While to date, revenues from
d.b.Express have been  insignificant,  management  believes that its proprietary
software  technology  has  significant  potential in several  areas,  and solves
certain  significant  business  issues in the  telecommunications  and  internet
related markets.  In order to realize the potential of this product,  management
will need to  aggressively  pursue all  marketing  opportunities.  To date,  the
Company  has  incurred  significant  losses  (both cash  expenses  and  non-cash
expenses) as a result of the development and marketing of d.b.Express. There can
be no assurances that the Company will be successful in achieving  positive cash
flows from  operations  with  respect to the  d.b.Express  product.  The Company
continues to pursue license and development  agreements with various  companies.
While none of the Company's  existing  agreements or development  opportunities,
that relate to d.b.Express, provide sales commitments,  management believes that
the  successful  exploitation  of its  d.b.Express  technology,  as  well as the
continued  growth of Softworks,  will  eventually  enable the Company to achieve
positive  cash  flows  from  operations.   Unless  the  Company   determines  to
discontinue  its pursuit of d.b.Express  revenues  (which  requires  significant
financial resources), the Company will need to generate positive cash flows from
operations  from the sale of  d.b.Express  product  in  order  to  decrease  its
dependency on cash flows from  financing  activities and remain a going concern.
At November 10, 1997, the Company had cash and cash equivalents of approximately
$1,674,000.  Ultimately,  however,  positive cash flows from  operations will be
necessary in order to curtail the Company's reliance on equity placements.

     In  connection  with the 1993  acquisition  of  Softworks,  the  Company is
required to make additional  payments to two of Softworks' former  shareholders,
based upon certain  product  revenues for the years 1995 through  1998,  up to a
maximum of $1,000,000  each,  for an aggregate  maximum of  $2,000,000.  Through
September  30,  1997,  the  Company  has  incurred  an  aggregate  liability  of
$1,409,000,  (of which  $1,289,000  has been  paid) to the  non-employee  former
shareholders,  which has been treated as additional  consideration in connection
with the acquisition, and, accordingly,  included in the excess of cost over the
fair value of net assets acquired,  as these individuals did not continue in the
employment of the Company  subsequent to the  acquisition.  No other  contingent
payments have been made under the terms of this agreement.

     In July,  1997,  the Company  completed a transaction  in which it sold all
rights to the underlying software  technologies of its Maplinx, Inc. subsidiary.
Further,  as part of the  transaction,  the  purchaser  acquired all of Maplinx'
current  assets  and  assumed  all  of  its  liabilities.  The  sales  price  of
approximately  $850,000 was adjusted (reduced) by the excess of Maplinx' current
liabilities  over current assets  (approximately  $380,000),  resulting in a net
sales price of $470,000. Approximately $235,000 was paid at closing, the balance
of $235,000 plus  interest is due six months from  closing.  As a result of this
transaction, the Company recognized a gain on the sale of net assets of $813,000
in the quarter ended September 30, 1997.
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

         For the Three and Nine Months Ended September 30, 1997 and 1996

Financial Condition and Liquidity (Continued)

     The Company is a defendant in several  lawsuits  and class  action  claims.
Based on consultation  with legal counsel,  the Company and its officers believe
that meritorious  defenses exist regarding the lawsuits and claims, and they are
vigorously  defending against the allegations.  The Company is unable to predict
the ultimate  outcome of the claims,  which could have a material adverse effect
on the consolidated financial position and results of operations of the Company.
Accordingly,  except as expressly discussed herein, the financial  statements do
not reflect any adjustments that might result from the ultimate outcome of these
litigation matters.

     Softworks  sells  perpetual  and  fixed  term  licenses  for its  mainframe
products,  for  which  extended  payment  terms of three  to five  years  may be
offered.  In the case of  extended  payment  term  agreements,  the  customer is
contractually  bound to equal  annual  fixed  payments.  The first  year of post
contract customer support (PCS) is bundled with standard license agreements. In
the case of extended payment term  agreements,  PCS is bundled for the length of
the payment term. Thereafter,  in both instances,  the customer may purchase PCS
annually. At September 30, 1997, the amount of such future receivables extending
beyond one year was  approximately  $6,980,000,  and is included in  installment
accounts receivable, due after one year and deferred revenues.
COMPUTER CONCEPTS CORP. AND SUBSIDIARIES
                           PART II - OTHER INFORMATION

    For the Three and Nine Months Ended September 30, 1997 and 1996

Item 1.  Legal Proceedings
 See Note 5.c. to the Condensed Consolidated Financial Statements.

Item 2.  Changes in Securities
 Not applicable.

Item 3.  Defaults Upon Senior Securities
 Not applicable.

Item 4.  Submission of Matters to a Vote of Security Holders
 Not Applicable

Item 5.  Other Information
 Not Applicable

Item 6. Exhibits and Reports on Form 8-K The Company  filed the  following  Form
8-Ks:

  May 23, 1997    Item 9 - Sale of equity securities pursuant to Regulation S
  May 29, 1997    Item 4 - Dismissal of  independent auditors
  June 3, 1997    Item 4 - Engagement of new independent auditors.
______________________________________________________

No  dealer,  salesperson  or any other  person has been  authorized  to give any
information  or to make any  representations  in  connection  with this offering
other  than  those   contained   in  this   Prospectus.   Any   information   or
representations not herein contained,  if given or made, must not be relied upon
as having been authorized by the Company. This Prospectus does not constitute an
offer to sell or a  solicitation  of an offer to buy any security other than the
securities  offered by this Prospectus,  nor does it constitute an offer to sell
or a  solicitation  of an  offer  to buy the  securities  by any  person  in any
jurisdiction where such offer or solicitation is not authorized, or in which the
person  making such offer is not qualified to do so, or to any person to whom it
is unlawful to make such offer or solicitation.  The delivery of this Prospectus
shall not, under any circumstances create any implication that there has been no
change in the affairs of the Company since the date hereof.

        ______________________________________________________

                                TABLE OF CONTENTS

                                                               Page
                                                               ----   

Reports to Security Holders ................................    2
Available Information ......................................    2
Prospectus Summary .........................................    3
Risk Factors ...............................................    7
Dividend Policy ............................................   11
Capitalization .............................................   11
Selected Financial Data ....................................   12
Management's Discussion and Analysis .......................   13
Business ...................................................   19
Management .................................................   30
Certain Transactions .......................................   36
Security Ownership of Certain Beneficial
  Owners and Management ....................................   37
Selling Security holders ...................................   38
Plan of Distribution .......................................   46
Shares Eligible for Future Sale ............................   47
Description of Securities ..................................   48
Legal Matters ..............................................   49
Experts ....................................................   49
Index to Financial Statements ..............................   50
Financial Statements .......................................   F-1

Until ____________ (25 days after the commencement of the offering), all dealers
effecting  transactions  in the  Shares,  whether or not  participating  in this
distribution, may be required to deliver a Prospectus. This delivery requirement
is in addition to the obligation of dealers to deliver a Prospectus  when acting
as Underwriters and with respect to their unsold allotments or subscriptions.

        ______________________________________________________

                                11,747,318 Shares
                                 of Common Stock

                             COMPUTER CONCEPTS CORP.

                                  _____________

                                   PROSPECTUS

                                  _____________

                                January ___, 1998
PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution

        The estimated expenses of the distribution, all of which are to be borne
by the Company, are as follows:
SEC Registration Fee (Previously paid) ...   $  1,625
Blue Sky Fees and Expenses ...............     15,000
Legal Fees and Expenses ..................     15,000
Accounting Fees and Expenses .............     15,000
Printing Expenses ........................     25,000
Miscellaneous ............................     23,375
                                             --------
      Total ..............................   $ 95,000
Item 15. Indemnification of Directors and Officers

     See "Management - Personal Liability and Indemnification of Directors".

Item 16. Recent Sales of Unregistered Securities

     The following discussion sets forth all sales of unregistered securities by
the  Company   during  the  last  three  years.   No  sales  were  made  through
underwriters,  and unless  otherwise  noted,  all securities sold were shares of
Common Stock:

1994
     During 1994, in an offering to 34 accredited investors,  the Company issued
an aggregate of 2,069,000 shares of its Common Stock pursuant to Regulation D of
the Act for an aggregate offering price of $1,214,000 with commissions and costs
of the offering aggregating  approximately  $200,000 of that amount. The Company
also  issued  600,000  shares of its Common  Stock upon the  exercise in 1994 of
options  exercisable at $.01 per share  previously  issued to two consultants as
compensation   for   services   rendered.   Each  of  the   investors   provided
representations  confirming  their status as accredited  investors.  The Company
claims  exemption for the foregoing  issuances of its Common Stock under the Act
by virtue of Section 4(2) as transactions not involving a public offering.  Each
of the persons  acquiring  such  securities  represented  in writing that he was
acquiring such  securities for investment and not with a view to distribution to
the  public.  All of the  securities  were  issued  with  a  restrictive  legend
regarding  transfer,  and  stop-transfer  orders  were  given  to the  Company's
transfer  agent in  connection  with the Common  Stock so  issued.  There was no
public  advertising,   and  each  of  the  purchasers  had  access  to  complete
information regarding the business of the Company.

     Also in the  second  quarter  of  1994,  in  off-shore  transactions  in an
offering to two non-United  States persons who were also  accredited  investors,
the Company issued an aggregate of 2,520,000 shares of its Common Stock pursuant
to Regulation S of the Act for an aggregate  offering price of $1,587,500,  with
commissions and costs of the offering aggregating approximately $190,000 of that
amount.  The Company claims  exemption for the foregoing  issuance of its Common
Stock  under the Act by virtue of  Sections  901,  et seq.  of  Regulation  S as
promulgated  under the Act,  and also by virtue  of  Section  4(2) of the Act as
transactions not involving a public offering. Each of the persons acquiring such
securities  represented  in writing that he was acquiring  such  securities  for
investment and not with a view to  distribution to the public and also confirmed
their non U.S. Person status (as defined in Regulation S). All of the securities
were issued with a restrictive  legend  regarding  transfer,  and  stop-transfer
orders were given to the Company's  transfer agent in connection with the Common
Stock so issued. There was no public advertising, and each of the purchasers had
access to complete information regarding the business of the Company.
During  1994,  the  Company  acquired  three  computer  software  companies
(MapLinx,  DBopen and CCEL) and computer software technology assets (Superbase).
In  conjunction  with these  acquisitions,  the Company  issued an  aggregate of
7,979,000  shares  of its  Common  Stock,  including  175,000  shares  issued as
finder's fees and 267,000  shares issued as the result of the Company's  failure
to timely effect the registration of shares issued to the seller of the software
technology asset. In conjunction with the acquisition of that asset, the Company
agreed to a penalty  provision  requiring  payment of a penalty and  issuance of
additional  shares  in the  event  the  Company  failed  to  effect  the  timely
registration  of the sellers Common Stock.  In the  transactions  to acquire the
three  companies,  the Company's Common Stock was issued in exchange for 100% of
the securities of each of the three companies.  The Company claims exemption for
the  foregoing  issuance of its Common  Stock under the Act by virtue of Section
4(2) as  transactions  not  involving  a public  offering.  Each of the  persons
acquiring  such  securities  represented  in writing that he was acquiring  such
securities for investment and not with a view to distribution to the public. All
of the securities were issued with a restrictive legend regarding transfer,  and
stop-transfer  orders were given to the Company's  transfer  agent in connection
with the Common Stock so issued.  There was no public  advertising,  and each of
the purchasers had access to complete information  regarding the business of the
Company.

     The Company also issued 375,000 shares or options exercisable for shares of
its Common Stock as compensation  to employees and consultants  during 1994. The
Company claims  exemption for the foregoing  issuances of its Common Stock under
the Act by  virtue  of  Section  4(2) as  transactions  not  involving  a public
offering.  Each of the persons acquiring such securities  represented in writing
that he was acquiring  such  securities  for  investment  and not with a view to
distribution to the public. All of the securities were issued with a restrictive
legend regarding transfer,  and stop-transfer orders were given to the Company's
transfer  agent in  connection  with the Common  Stock so  issued.  There was no
public  advertising,   and  each  of  the  purchasers  had  access  to  complete
information regarding the business of the Company.

1995

     During  the  first  and  second  quarters  of  1995,  in two  offerings  to
thirty-seven accredited investors,  the Company issued an aggregate of 5,800,279
shares of its Common Stock  pursuant to Regulation D of the Act for an aggregate
offering  price of  $3,125,415,  with  commissions  and  costs  of the  offering
aggregating  approximately  $629,677 of that  amount.  In  December of 1995,  an
employee of the Company  paid $12,500 to exercise  options for 25,000  shares of
Common Stock. Each of the investors  provided  representations  confirming their
status as accredited  investors.  The Company claims exemption for the foregoing
issuances  of its  Common  Stock  under  the Act by virtue  of  Section  4(2) as
transactions not involving a public offering. Each of the persons acquiring such
securities  represented  in writing that he was acquiring  such  securities  for
investment  and  not  with a view  to  distribution  to the  public.  All of the
securities  were  issued  with a  restrictive  legend  regarding  transfer,  and
stop-transfer  orders were given to the Company's  transfer  agent in connection
with the Common Stock so issued.  There was no public  advertising,  and each of
the purchasers had access to complete information  regarding the business of the
Company.

     Also in the first and second quarters of 1995, in off-shore transactions in
two  offerings  to twenty  non-United  States  persons who were also  accredited
investors,  the Company  issued an aggregate of 14,761,712  shares of its Common
Stock  pursuant to  Regulation S of the Act for an aggregate  offering  price of
$6,680,000,   with   commissions   and  costs  of  the   offerings   aggregating
approximately  $797,600  of that  amount.  Also,  in  December  of  1995,  in an
off-shore  offering to two non-United  States  persons who were also  accredited
investors, the Company issued an aggregate of 300,000 shares of its Common Stock
pursuant to Regulation S of the Act for an aggregate offering price of $450,000,
with no commissions or expenses of sale.
 The Company  claims  exemption for the  foregoing  issuance of its Common Stock
under the Act by virtue of Sections 901, et seq. of Regulation S as  promulgated
under the Act, and also by virtue of Section 4(2) of the Act as transactions not
involving a public  offering.  Each of the  persons  acquiring  such  securities
represented in writing that he was acquiring such  securities for investment and
not with a view to  distribution to the public and also confirmed their non U.S.
Person status (as defined in Regulation  S). All of the  securities  were issued
with a restrictive  legend regarding  transfer,  and  stop-transfer  orders were
given to the Company's  transfer  agent in  connection  with the Common Stock so
issued.  There was no public advertising,  and each of the purchasers had access
to complete information regarding the business of the Company.

     The  Company  also  issued   2,137,000   shares  of  its  Common  Stock  as
compensation  to employees and  consultants  and 219,000 shares as settlement of
trade  payables  during 1995.  The Company  claims  exemption  for the foregoing
issuances  of its  Common  Stock  under  the Act by virtue  of  Section  4(2) as
transactions not involving a public offering. Each of the persons acquiring such
securities  represented  in writing that he was acquiring  such  securities  for
investment  and  not  with a view  to  distribution  to the  public.  All of the
securities  were  issued  with a  restrictive  legend  regarding  transfer,  and
stop-transfer  orders were given to the Company's  transfer  agent in connection
with the Common Stock so issued.  There was no public  advertising,  and each of
the purchasers had access to complete information  regarding the business of the
Company.

1996

     On January 24, 1996, the Company  completed an off-shore  offering to three
non-United States persons who were also accredited investors,  of 425,000 shares
of restricted common stock under three private placements. On February 23, 1996,
the Company  completed a second  off-shore  offering to five  non-United  States
persons who were also  accredited  investors,  of 590,000  shares of  restricted
common stock under five  private  placements.  Proceeds  raised from these sales
aggregated $1,750,000, net of offering commissions and expenses of approximately
$280,000. A total of 1,015,000 shares were sold at $2.00 per share. On March 18,
1996, an additional $1,700,000 (net of commissions and expenses of approximately
$300,000) was raised from the sale of 13% convertible debentures to one non-U.S.
investor.  Such debentures were converted at the option of the holder,  into the
restricted common stock of the Company at a conversion rate of 67.5% of the fair
market  value  of the  Company's  common  stock  for  the  principal  amount  of
$2,000,000 plus accrued interest, in May of 1996 into 2,473,837 shares. On April
15, 1996, $3,000,000 (before commissions and expenses of approximately $300,000)
was raised from the sale of 5% convertible debentures to one non-U.S.  investor,
$250,000 of which was converted into 250,000 shares on June 10, 1996, $1,000,000
of which was converted into 1,162,790 shares on July 2, 1996, and the balance of
$1,750,000 of which was converted into 2,011,494  shares on July 3, 1996, all at
a conversion rate of 75% of the fair market value of the Company's  common stock
at the  time  of  conversion.  The  Company  placed  another  $3,000,000  of 13%
Convertible   Debentures  (before  commissions  and  expenses  of  approximately
$194,000) with eight non-U.S.  investors, all of which was converted into common
stock of the Company from June 3, 1996,  through July 1, 1996,  for an aggregate
of 3,079,132  shares at a conversion rate of 75% of the fair market value of the
Company's  common  stock at the time of  conversion.  The Company also placed an
additional  $3,300,000 of 5%  Convertible  Debentures  (before  commissions  and
expenses of approximately $430,000) with one non-U.S. investor on June 28, 1996,
which was  converted  into common  stock of the Company  from August 28, 1996 to
November 28, 1996, for an aggregate of 7,654,441  shares at a conversion rate of
80% of the  fair  market  value  of the  Company's  common  stock at the time of
conversion.  All  of the  foregoing  transactions  were  effected  in  off-shore
offerings  with non-U.S.  investors  pursuant to Regulation S of the  Securities
Act. The Company claims exemption for the foregoing issuance of its Common Stock
under the Act by virtue of Sections 901, et seq. of Regulation S as  promulgated
under the Act, and also by virtue of Section 4(2) of the Act as transactions not
involving a public  offering.  Each of the  persons  acquiring  such  securities
represented in writing that he was acquiring such  securities for investment and
not with a view to  distribution to the public and also confirmed their non U.S.
Person status (as defined in Regulation  S). All of the  securities  were issued
with a restrictive  legend regarding  transfer,  and  stop-transfer  orders were
given to the  Company's  transfer  agent in  connection  with the  securities so
issued.  There was no public advertising,  and each of the purchasers had access
to complete information regarding the business of the Company.

     The Company also issued 4,934,535 shares of its restricted  Common Stock as
compensation to employees and consultants and 8,107,405  shares in settlement of
company  obligations  related to prior acquisition  transactions of the company.
The Company  claims  exemption for the  foregoing  issuances of its Common Stock
under the Act by virtue of Section 4(2) as  transactions  not involving a public
offering.  Each of the persons acquiring such securities  represented in writing
that he was acquiring  such  securities  for  investment  and not with a view to
distribution to the public. All of the securities were issued with a restrictive
legend regarding transfer,  and stop-transfer orders were given to the Company's
transfer  agent in  connection  with the Common  Stock so  issued.  There was no
public  advertising,   and  each  of  the  purchasers  had  access  to  complete
information regarding the business of the Company.

1997

     During 1997,  in one offering to three  accredited  investors,  the Company
issued  an  aggregate  of  4,615,385  shares of its  Common  Stock  pursuant  to
Regulation  D of the Act for an aggregate  offering  price of  $3,000,000,  with
commissions and costs of the offering aggregating approximately $240,000 of that
amount.  In February of 1997, an employee of the Company paid $2,625 to exercise
options  for 5,250  shares  of  Common  Stock.  Each of the  investors  provided
representations  confirming  their status as accredited  investors.  The Company
claims  exemption for the foregoing  issuances of its Common Stock under the Act
by virtue of Section 4(2) as transactions not involving a public offering.  Each
of the persons  acquiring  such  securities  represented  in writing that he was
acquiring such  securities for investment and not with a view to distribution to
the  public.  All of the  securities  were  issued  with  a  restrictive  legend
regarding  transfer,  and  stop-transfer  orders  were  given  to the  Company's
transfer  agent in  connection  with the Common  Stock so  issued.  There was no
public  advertising,   and  each  of  the  purchasers  had  access  to  complete
information regarding the business of the Company.

     In May 1997,  $3,381,000 (net of commissions and expenses of  approximately
$484,000) was raised from the sale of 13% convertible debentures to two non-U.S.
investors. Such debentures were converted at the option of the holders, into the
restricted  common stock of the Company at a conversion  rate of 75% of the fair
market  value  of the  Company's  common  stock  for  the  principal  amount  of
$3,865,000 in July of 1997 into 11,982,343  shares. The Company claims exemption
for the  foregoing  issuance  of its  Common  Stock  under  the Act by virtue of
Sections 901, et seq. of Regulation S as promulgated  under the Act, and also by
virtue  of  Section  4(2) of the Act as  transactions  not  involving  a  public
offering.  Each of the persons acquiring such securities  represented in writing
that he was acquiring  such  securities  for  investment  and not with a view to
distribution  to the public and also confirmed  their non U.S. Person status (as
defined in Regulation S). All of the  securities  were issued with a restrictive
legend regarding transfer,  and stop-transfer orders were given to the Company's
transfer  agent in  connection  with the Common  Stock so  issued.  There was no
public  advertising,   and  each  of  the  purchasers  had  access  to  complete
information regarding the business of the Company.
The  Company  also  issued  7,409,362  shares  of  its  Common  Stock  as
compensation  to  employees  and  consultants  during 1997.  The Company  claims
exemption  for the  foregoing  issuances  of its Common  Stock  under the Act by
virtue of Section 4(2) as transactions not involving a public offering.  Each of
the  persons  acquiring  such  securities  represented  in  writing  that he was
acquiring such  securities for investment and not with a view to distribution to
the  public.  All of the  securities  were  issued  with  a  restrictive  legend
regarding  transfer,  and  stop-transfer  orders  were  given  to the  Company's
transfer  agent in  connection  with the Common  Stock so  issued.  There was no
public  advertising,   and  each  of  the  purchasers  had  access  to  complete
information regarding the business of the Company.

1998

     During  1998,  in one  offering to two  accredited  investors,  the Company
issued  an  aggregate  of  4,962,318  shares of its  Common  Stock  pursuant  to
Regulation  D of the Act for an aggregate  offering  price of  $2,140,000,  with
commissions and costs of the offering aggregating approximately $160,000 of that
amount. Each of the investors provided  representations  confirming their status
as  accredited  investors.  The  Company  claims  exemption  for  the  foregoing
issuances  of its  Common  Stock  under  the Act by virtue  of  Section  4(2) as
transactions not involving a public offering. Each of the persons acquiring such
securities  represented  in writing that he was acquiring  such  securities  for
investment  and  not  with a view  to  distribution  to the  public.  All of the
securities  were  issued  with a  restrictive  legend  regarding  transfer,  and
stop-transfer  orders were given to the Company's  transfer  agent in connection
with the Common Stock so issued.  There was no public  advertising,  and each of
the purchasers had access to complete information  regarding the business of the
Company.

     The Company also issued 215,000 shares of its Common Stock as  compensation
to employees and consultants  during 1998. The Company claims  exemption for the
foregoing  issuances of its Common Stock under the Act by virtue of Section 4(2)
as transactions not involving a public offering.  Each of the persons  acquiring
such securities represented in writing that he was acquiring such securities for
investment  and  not  with a view  to  distribution  to the  public.  All of the
securities  were  issued  with a  restrictive  legend  regarding  transfer,  and
stop-transfer  orders were given to the Company's  transfer  agent in connection
with the Common Stock so issued.  There was no public  advertising,  and each of
the purchasers had access to complete information  regarding the business of the
Company.

Item 17.  Exhibits and Financial Statement Schedules.

     2.1  Reorganization  Agreement  dated  April  22,  1989.  (Incorporated  by
          reference  to  Exhibit  2(a) to the  Company's  Form S-1  Registration
          Statement) (1)
     2.2  Merger agreement between Computer  Concepts  Investment Corp. and RAMP
          Associates Inc. dated October 31, 1990.  (Incorporated by reference to
          Exhibit 2(b) to the Company's Form S-1 Registration Statement)(1)
     2.3  Merger agreement between Computer  Concepts Corp. and Softworks,  Inc.
          (Incorporated  by reference to Exhibit 2(a) to the Company's  Form 8-K
          filed on October 29, 1993)
     2.4  Merger  Agreement  dated December 31, 1994,  between the Company,  its
          wholly owned  subsidiary,  CCC/MapLinx  Corp.,  and MapLinx Corp.  and
          Merit Technology,  Inc. (Incorporated by reference to Exhibit 10(a) to
          the  Company's  Annual Report on Form 10-K/A for the fiscal year ended
          December 31, 1994.)

     3.1(i)(a) Certificate  of  Incorporation,  as amended.  (Incorporated  by
               reference to Exhibit 3(a) of Form S-1 Registration Statement.)(1)
           (b) Certificate  of  Amendment  (Change  in  Name)  (Incorporated  by
               reference to Exhibit 3(a) of Form S-1 Registration Statement.)(1)
           (c) Certificate  of  Amendment  (Change  in  Name)  (Incorporated  by
               reference to Exhibit 3(a) of Form S-1 Registration Statement.)(1)
           (d) Certificate  of  Amendment  (Authorizing  Increase  in  Shares of
               Common Stock)  (Incorporated by reference to Exhibit 3.1(i)(d) of
               Form 10-K filed April 15, 1996.)
     3.2(ii)  By-Laws.  (Incorporated  by  reference  to  Exhibit  3(d)  to  the
          Company's Form S-1 Registration Statement.)(1)
     4.1  Form of  Common  Stock  Certificate.  (Incorporated  by  reference  to
          Exhibit 4 to the Company's Form S-1 Registration Statement.)(1)
     4.2  Computer  Concepts  Directors,  Officers  and  Consultants  1993 Stock
          Option Plan (Incorporated by reference to Exhibit 4.1 to the Company's
          Registration Statement on Form S-8 filed on June 28, 1995)
     4.3  Computer  Concepts  Employees  1993  Stock  Option  Plan  (Incorp.  by
          reference to Exhibit 4.2 to the  Company's  Registration  Statement on
          Form S-8 filed on June 28, 1995)
4.4  Computer Concepts 1995 Incentive Stock Plan (Incorporated by reference
          to Exhibit 5 to the  Company's  Proxy  Statement  filed on January 29,
          1996.)
     10.1 Lease  Extension  Agreement  between Atrium  Executive  Center and the
          Company  (Incorporated  by  reference  to  Exhibit  10(g)(ii)  to  the
          Company's  Annual  Report  on Form  10-K  for the  fiscal  year  ended
          December 31, 1993.)
     10.2 Agreement between Software Publishing Corp. And the Company dated June
          14, 1994. (Incorp. by reference to Exhibit 10(a) to the Company's Form
          8-K filed on July 1, 1994.)
     10.3 Agreement between Computer Concepts Europe, Ltd. and the Company dated
          August 15, 1993.  (Incorporated  by reference to Exhibit  10(v) to the
          Company's  Annual  Report on Form  10-K/A  for the  fiscal  year ended
          December 31, 1993.)
     10.4 Agreement between Computer Concepts Europe, Ltd. and the Company dated
          September 27, 1993. (Incorporated by reference to Exhibit 10(w) to the
          Company's  Annual  Report on Form  10-K/A  for the  fiscal  year ended
          December 31, 1993.)
     22   Subsidiaries of the Company.  (Incorporated by reference to Exhibit 22
          to the Company's  Annual Report on Form 10-K for the fiscal year ended
          December 31, 1996.)
--------
     (1) Filed with Form S-1, Registration  Statement of Computer Concepts Corp.
     Reg. No. 33-47322 and are incorporated herein by reference.

The following Exhibits are filed herewith:

     5.   Opinion regarding Legality (Opinion by Daniel B. Kinsey, P.C.)
     24.1 Consent of Daniel B. Kinsey, Esq. (Included in Item 5)
     24.2 Consent of Hays & Company
     25.1 Powers of Attorney (appear on page II-4).
--------
(1)  All  references  to  Registration  on Form S-1  refer to  Registration  No.
     33-47322.

Item 18. Undertakings.

     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to  directors,  officers,  and  controlling
persons of the issuer  pursuant to the  Certificate  of  Incorporation,  Bylaws,
indemnity  agreements,  the foregoing provisions,  or otherwise,  the issuer has
been advised that in the opinion of the Securities and Exchange  Commission such
indemnification  is  against  public  policy  as  expressed  in the  Act and is,
therefore,  unenforceable. In the event that a claim for indemnification against
such liabilities  (other than the payment by the issuer of expenses  incurred or
paid  by a  director,  officer  or  controlling  person  of  the  issuer  in the
successful  defense of any  action,  suit or  proceeding)  is  asserted  by such
director,  officer or controlling person in connection with the securities being
registered, the issuer will, unless in the opinion of its counsel the matter has
been  settled  by  controlling  precedent,  submit  to a  court  of  appropriate
jurisdiction the question whether such  indemnification  by it is against public
policy as  expressed  in the  Securities  Act and will be  governed by the final
adjudication of such issue.
Registrant hereby undertakes that it will:

     (1)  File,  during  any  period in which it offers or sells  securities,  a
          post-effective amendment to this registration statement to:

          (i)  Include  any  prospectus  required  by  Section  10(a)(3)  of the
               Securities Act;

          (ii) Reflect in the prospectus any facts or events which, individually
               or together, represent a fundamental change in the information in
               the registration statement; and

          (iii)Include any  additional or changed  material  information  on the
               plan of distribution.

   (2)    For  determining  any liability  under the Securities  Act, treat each
          post-effective  amendment  that contains a form of prospectus as a new
          registration  statement for the securities offered in the registration
          statement,  and that  offering of the  securities  at that time as the
          initial bona fide offering of those securities.

   (3)    File a post-effective amendment to remove from registration any of the
          securities that remain unsold at the end of the offering.

   (4)    For  determining  any liability  under the  Securities  Act, treat the
          information  omitted from the form of prospectus filed as part of this
          registration  statement in reliance  upon Rule 430A and contained in a
          form of prospectus filed by the issuer under Rule 424(b)(1), or (4) or
          497(h) under the Securities Act as part of this registration statement
          as of the time the Commission declared it effective.

   (5)    Provide  to  the   underwriter   at  the  closing   specified  in  the
          underwriting   agreement   certificates  in  such   denominations  and
          registered  in such names as  required  by the  underwriter  to permit
          prompt delivery to each purchaser.
SIGNATURES

   In  accordance  with the  requirements  of the  Securities  Act of 1933,  the
registrant certifies that it has reasonable grounds to believe that it meets all
of the  requirements  of filing  on Form S-1 and  authorized  this  registration
statement to be signed on its behalf by the undersigned, in Bohemia, New York on
the 20th day of January, 1998.

                               COMPUTER CONCEPTS CORP.

                               By: /s/ Daniel Del Giorno
                                   -----------------------------------
                                      Daniel Del Giorno, Sr., Chairman

                                POWER OF ATTORNEY

Pursuant to the  requirements of the Securities Act of 1933,  this  Registration
Statement has been signed below on January 20, 1998, by the following persons in
the  capacities  indicated.  Each  person  whose  signature  appears  below also
constitutes   and   appoints   Daniel   DelGiorno,   Jr.  his  true  and  lawful
attorney-in-fact  and agent, with full power of substitution and resubstitution,
for him and in his name,  place and stead, in any and all capacities to sign any
and all amendments  (including  post-effective  amendments) to this Registration
Statement,  and to file  the  same,  with all  exhibits  thereto  and all  other
documents in  connection  therewith,  with the  Commission,  granting  unto said
attorney-in-fact  and agent full power and  authority to do and perform each and
every act and thing  requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person,  hereby ratifying and confirming
all that said  attorney-in-fact  and agent or his substitute or substitutes  may
lawfully do or cause to be done by virtue hereof.

          Signatures                           Title
          ----------                           -----

/s/ Daniel Del Giorno
---------------------------                  Chairman, Director, Ass't Sec.
Daniel Del Giorno, Sr.

/s/ Daniel Del Giorno
---------------------------                  President, Principal Operating
Daniel Del Giorno, Jr.                       Officer, Director

/s/ Jack Stuart Beige
---------------------------                  Director
Jack Stuart Beige

/s/ George Aronson
---------------------------                  Chief Financial Officer
George Aronson
SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

================================================================================

                             COMPUTER CONCEPTS CORP.

================================================================================

                         Form S-1 Registration Statement

                                       ``

________________________________________________________________________________

                             E X H I B I T  I N D E X
________________________________________________________________________________
Page No. in Sequential
Exhibit                                                  Numbering of all Pages,
Number       Exhibit Description                         including Exhibit Pages
-------      -------------------                         -----------------------
5        Opinion and Consent of Counsel . . . . . . . .

23.1     Consent of Counsel . . . . . . . . . . . . . .     See Exhibit 5

23.2     Consent of Hays & Company  . . . . . . . . . .

24       Powers of Attorney . . . . . . . . . . . . . .     See signature page