COMPUTER CONCEPTS CORP /DE, S-1, 1998-01-22

COMPUTER CONCEPTS CORP /DE
S-1, 1998-01-22
COMPUTER INTEGRATED SYSTEMS DESIGN

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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

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.

<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.

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.

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:

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.

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%

<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

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.

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.

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

<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

5. COMMITMENTS AND CONTINGENCIES

a. Contingent Consideration

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

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.

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.

<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)

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.

<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.

<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>

Exhibit 5

Daniel B. Kinsey, P.C.
80 Orville Drive, Suite 247, Bohemia, New York 11716
Tel(5l6)244-1465 . Fax(5l6)244-1468

January 20, 1998

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Re: Computer Concepts Corp.
Registration Statement on Form S-1

Gentlemen:

Reference is made to the filing by Computer Concepts Corp. (the "Corporation")
of a Registration Statement on Form S-1 with the Securities and Exchange
Commission pursuant to the provisions of the Securities Act of 1933, as amended,
covering the registration of 11,747,318 shares of the Corporation's Common
Stock, $.0001 par value per share.

As counsel for the Corporation, we have examined its corporate records,
including its Certificate of Incorporation, as amended, By-Laws, its corporate
minutes, the form of its Common Stock certificate and other documents as we have
deemed necessary or relevant under the circumstances.

Based upon our examination, we are of the opinion that:

1. The Corporation is duly organized and validly existing under the laws of
the State of Delaware.

2. The 11,327,318 shares and the 420,000 shares issuable upon exercise of
options or warrants, of the Corporation's Common Stock, when issued
pursuant to the exercise terms of said options or warrants and in
accordance with any exercise restrictions applicable thereto, are or will
be validly authorized, legally issued, fully paid and non-assessable.

We hereby consent to be named in the Registration Statement and in the
Prospectus which constitutes a part thereof as counsel of the Corporation, and
we hereby consent to the filing of this opinion as Exhibit 5 to the Registration
Statement.

Very truly yours,
DANIEL B. KINSEY, P.C.

/s/Daniel B. Kinsey

Daniel B. Kinsey

Exhibit 23.2
Hays & Company
CERTIFIED PUBLIC ACCOUNTANTS
INTERNATIONALLY HAYS ALLAN AFFILIATES

INDEPENDENT AUDITOR'S CONSENT

We consent to the use in this Registration Statement of Computer Concepts Corp.
on Form S-1 of our report dated October 23, 1997 (except for Note 12 which is
dated November 26, 1997), which report includes an explanatory paragraph as to
an uncertainty with respect to the Company's ability to continue as a going
concern, appearing in the Prospectus, which is a part of such Registration
Statement, and to the use of our name as it appears under the caption "Experts."

/s/ Hays & Company

Hays & Company

January 20, 1998
New York, New York