UNITED STATES
                        SECURITIES AND EXCHANGE COMMISSION

                               Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)
                  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
     (X)              OF THE SECURITIES EXCHANGE ACT OF 1934


                 For the Quarterly Period Ended June 30, 1998 

                                        OR

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

For the Transition Period from                to                  

Commission File Number                  0-13084                   

                               WARRANTECH CORPORATION                  
               (Exact name of registrant as specified in its charter)

                  Delaware                           13-3178732        
     (State or other jurisdiction of              (I.R.S. Employer
      incorporation or organization)              Identification No.)

      300 Atlantic Street, Stamford, CT                 06901          
  (Address of principal executive offices)            (Zip Code)

Registrant's telephone number, including area code   (203) 975-1100  

                                                                      
(Former name,former address and former fiscal year, if changed since last year)

    Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.     Yes  X       No    

   Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

             Class                          Outstanding at June 30, 1998_
Common stock, par value $.007 per share            13,323,573 shares


                         1

<PAGE>

                    WARRANTECH CORPORATION AND SUBSIDIARIES


                                  I N D E X

                                                                    Page No.
PART I  -  Financial Information:


           Item 1.  Financial Statements:

           Condensed Consolidated Balance Sheet at June 30, 1998
           (Unaudited) and March 31, 1998...................            3


           Condensed Consolidated Statement of Operations
            For the Three Months Ended June 30, 1998
            and 1997 (Unaudited) ............................           4


           Condensed Consolidated Statement of Comprehensive Income
            For the Three Months Ended June 30, 1998
            and 1997 (Unaudited) ............................           5


           Condensed Consolidated Statement of Cash Flows
            For the Three Months Ended June 30, 1998
            and 1997 (Unaudited) ............................           6


            Notes to Condensed Consolidated Financial Statements
            (Unaudited) ............................                    7


            Item 2.  Management's Discussion and Analysis of
                     Financial Condition and Results of Operations      9


PART II  - Other Information                                           11

Signatures ..............................................              12


                                   2

<PAGE>


<TABLE>
                        WARRANTECH CORPORATION AND SUBSIDIARIES
                            CONDENSED CONSOLIDATED BALANCE SHEET

A S S E T S
                                                      (Unaudited)
                                                        June 30,       March 31,
                                                    ------------------------------- 
                                                          1998             1998
                                                    -------------    -------------- 
                                                     
<S>                                                 <C>             <C>
Current Assets:
Cash and cash equivalents                           $  19,480,875    $  24,062,052

Investments in marketable securities                        2,541          537,924
                                                    

Accounts receivable, (net of allowances of $908,512
and $1,223,173, respectively)                          29,778,269       27,878,335
   
                                                                                  
Other receivables, net                                  2,611,771        2,197,405
Prepaid expenses and other current assets               1,785,008        1,775,316
                                                     ---------------    --------------
   Total Current Assets                                52,658,464       56,451,032
                                                      -------------    --------------


Property and Equipment - Net                           13,794,138       13,639,921
                                                      -------------    --------------

Other Assets:
Excess of cost over fair value of assets acquired
   (net of accumulated amortization of
    $4,380,369 and $4,212,956, respectively)             3,778,163       3,945,577
Deferred income taxes                                    3,122,591       3,085,311
Investments in marketable securities                     2,163,130       1,967,817
Restricted cash                                            800,000         800,000
Split dollar life insurance policies                     1,029,930       1,054,045
Notes receivable                                           631,457         654,068
Collateral security fund                                   199,389         199,389
Other assets                                               120,973         120,128
                                                      -------------    --------------
                                           
          Total Other Assets                            11,845,633      11,826,335
                                                      -------------    --------------
 
                Total Assets                          $ 78,298,235     $81,917,288
                                                      =============    ==============  

   


LIABILITIES AND COMMON STOCKHOLDERS' EQUITY

                                                      (Unaudited)
                                                        June 30,       March 31,
                                                    ------------------------------- 
                                                          1998             1998
                                                    -------------    -------------- 

Current Liabilities:
Current maturities of long-term debt and capital 
lease obligations                                     $  1,952,445     $  2,371,662

Insurance premiums payable                              24,617,519       22,269,589
Income taxes payable                                       167,448        1,850,999
Accounts and commissions payable                         7,703,833        7,698,948
Legal settlements payable                                  100,000          200,000
Accrued expenses and other current liabilities           3,468,056        6,011,572
                                                     ---------------    --------------
   Total Current Liabilities                            38,009,301       40,402,770
                                                     ---------------    --------------

Deferred Revenues                                        7,421,843        6,987,541

Long-term debt and capital lease obligations             1,882,647        2,153,286
                                                     
Deferred rent payable                                      584,009          608,736
                                                     ---------------    --------------
Total Liabilities                                       47,897,800       50,152,133
                                                     ---------------    --------------
Commitments and contingencies

Stockholders' Equity:
   Common stock - $.007 par value
     Authorized   - 30,000,000 shares
     Issued and outstanding - 13,483,573 shares
      at June 30, 1998 and 13,449,382 shares
      at March 31, 1998                                     94,385           94,146
   Additional paid-in capital                           14,329,804       14,124,700
   Accumulated other comprehensive income, 
      net of taxes                                          64,114           85,608
   Retained earnings                                    16,749,324       17,975,951
                                                     ---------------    --------------
                                                        31,237,627       32,280,405
Less:  Deferred compensation                               (15,732)         (21,631)
Treasury stock - at cost, 160,000 shares
   at June 30, 1998 and March 31, 1998                    (821,460)        (493,819)
                                                     ---------------    --------------
        Total Common Stockholders' Equity               30,400,435       31,764,955
                                                     ---------------    --------------

        Total Liabilities and
            Stockholders'  Equity                    $ 78,298,235       $81,917,288
                                                     ===============    ==============


        See accompanying notes to condensed consolidated financial statements.
</TABLE>
                                            3


<PAGE>


                                  WARRANTECH CORPORATION AND SUBSIDIARIES
                               CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                                                (Unaudited)
<TABLE>
<S>                                                    <C>                        <C>   

                                                          For the Three Months Ended
                                                                    June 30,
                                                     ------------------------------------------


                                                     --------------------   ---------------------
                                                             1998                   1997
                                                     --------------------   ---------------------
Gross revenues                                               $50,264,482             $53,327,030
Revenues deferred to future periods                            (780,951)               (558,208)
Deferred revenues earned                                         290,901                 149,049
                                                     --------------------   ---------------------
Net revenues                                                  49,774,432              52,917,871

Costs and expenses:
   Direct costs                                               36,535,216              38,945,085
   Service, selling, and general and administrative           14,176,847              11,314,775
   Depreciation and amortization                               1,274,614                 725,956
                                                     --------------------   ---------------------
Total costs and expenses                                      51,986,677              50,985,816
                                                     --------------------   ---------------------

Income (loss)  from operations                               (2,212,245)               1,932,055

Other income, net                                                169,960                 197,379
                                                     --------------------   ---------------------

Income (loss) before provision (benefit) for income taxes    (2,042,285)               2,129,434
Provision (benefit) for income taxes                           (815,658)                 802,230
                                                     --------------------   ---------------------

Net income (loss)                                           ($1,226,627)              $1,327,204
                                                     ====================   =====================

Earnings per share:
Basic                                                            ($0.09)                   $0.10
                                                     ====================   =====================
Diluted                                                          ($0.09)                   $0.08
                                                     ====================   =====================

Weighted average shares outstanding:
Basic                                                         13,362,303              13,176,344
                                                     ====================   =====================
Diluted                                                       13,362,303              15,661,561
                                                     ====================   =====================


</TABLE>
See accompanying notes to condensed consolidated financial statements.

                                   4

<PAGE>

                                  WARRANTECH CORPORATION AND SUBSIDIARIES
                       CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                                                (Unaudited)

                                                  For the Three Months Ended
                                               ---------------   ---------------
                                                           June 30,
                                               ---------------   ---------------
                                                    1998              1997
                                               ---------------------------------
Net income (loss)                                ($1,226,627)        $1,327,204

Other Comprehensive Income, net of tax
   Unrealized gain(loss) on investments               (1,133)            (5,709)
   Foreign currency translation adjustments          (20,361)            15,319
                                               ---------------------------------
Comprehensive income (loss)                      ($1,248,121)        $1,336,814
                                               ===============   ===============


                                   5

<PAGE>

                                         WARRANTECH CORPORATION AND SUBSIDIARIES
                                  CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                                          (Unaudited)

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

                                                                                                  For the Three Months
                                                                                                     Ended June 30,
                                                                                   -------------------------------------------------
                                                                                              1998                     1997
                                                                                   --------------------------    -------------------
Net cash (used in) provided by operating activities                                     ($ 2,904,060)                $ 5,619,796
                                                                                   --------------------------    -------------------

Cash flows from investing activities:
  Property and equipment purchased                                                        (1,065,906)                   (900,886)
  Purchase of marketable securities                                                         (205,420)                     (1,016)
  Proceeds from sales of marketable securities                                               540,045
                                                                                   --------------------------    -------------------
Net cash (used in) investing activities                                                     (731,281)                   (901,902)

Cash flows from financing activities:
   Decrease in notes receivable                                                               22,611                      28,949
   Proceeds from exercise of common stock options                                            205,343                     138,753
   Purchase of Treasury Stock                                                               (327,641)                        -
   Repayments, notes and capital leases                                                     (846,149)                   (521,902)
                                                                                   --------------------------    -------------------
Net cash (used in) financing activities                                                     (945,836)                   (354,200)
                                                                                   --------------------------    -------------------


Net (decrease) increase in cash and cash equivalents                                      (4,581,177)                  4,363,694

Cash and cash equivalents at beginning of period                                          24,062,052                  17,031,925
                                                                                   --------------------------    -------------------

Cash and cash equivalents at end of period                                              $ 19,480,875                 $21,395,619
                                                                                   ==========================    ===================

Supplemental Cash Flows Information

   Cash Payments for the Periods:
      Interest                                                                             $ 135,574                    $ 60,249
                                                                                   ==========================    ===================
 
      Income taxes                                                                         $ 903,668                   $ 222,185
                                                                                   ==========================    ===================

Noncash Investing and Financing Activities

Capital lease obligations incurred                                                         $ 156,293                   $ 323,600
                                                                                   ==========================    ===================

</TABLE>

        See accompanying notes to condensed consolidated financial statements.


                                   6

<PAGE>


                                       WARRANTECH CORPORATION AND SUBSIDIARIES
                            NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                                         June 30, 1998
                                                          (Unaudited)


1.  THE COMPANY

Warrantech Corporation ("Warrantech" or the "Company"), through its wholly-owned
subsidiaries, Warrantech Automotive, Inc., Warrantech Consumer Product Services,
Inc.,  Warrantech Help Desk,  Inc.,  Warrantech  Direct,  Inc.,  Warrantech Home
Service  Company and Warrantech  International,  Inc.,  markets and  administers
service  contract  programs for retailers,  distributors  and  manufacturers  of
automobiles,  homes, home appliances, home entertainment products, computers and
peripherals,  and office and  communication  equipment  and operates call center
services and  technical  computer  services in the United  States,  Puerto Rico,
Mexico, Canada, Caribbean,  South America and the United Kingdom.  Additionally,
third-party  administrative  services are provided to  manufacturers of consumer
and automotive products and other business entities requiring such services. The
actual  repair  service  under  such  extended  service  contracts  and  limited
warranties  is provided by third party  repair  facilities  and the cost of such
repair services is borne by the insurance  companies.  The predominant  terms of
the  contracts  and   manufacturers'   warranties  range  from  twelve  (12)  to
eighty-four (84) months.


2.  BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information and with the  instructions to Form 10-Q and Article 10 of
Regulation S-X.  Accordingly,  they do not include all information and footnotes
required by generally  accepted  accounting  principles  for complete  financial
statements. In the opinion of management,  all adjustments (consisting of normal
recurring  accruals)  considered  necessary  for a fair  presentation  have been
included.  Operating  results  for the  quarter  ended  June  30,  1998  are not
necessarily  indicative  of the results that may be expected for the year ending
March 31, 1999. For further  information,  refer to the  consolidated  financial
statements  and footnotes  thereto  included in the Company's Form 10-K and Form
10K/A for the year ended March 31, 1998.

Certain prior year amounts may have been reclassified to conform to current year
presentation.

                                   7

<PAGE>

3.  COMPREHENSIVE INCOME

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

                                                  For the Three Months Ended
                                               ---------------   ---------------
                                                           June 30,
                                               ---------------   ---------------
                                                    1998              1997
                                               ---------------------------------
Net income (loss)                                 ($1,226,627)        $1,327,204

Other Comprehensive Income, net of tax
   Unrealized gain(loss) on investments                (1,133)            (5,709)
   Foreign currency translation adjustments           (20,361)            15,319
                                               ---------------   ---------------
Comprehensive income                              ($1,248,121)        $1,336,814
                                               ===============   ===============

                                                 Unrealized          Foreign             Total
Other Comprehensive Income:                      Gain (Loss)        Currency             Other
The accumulated balances for the components          On            Translation       Comprehensive
 of Other Comprehensive Income are:              Investments       Adjustments           Income
                                               ---------------   ---------------   ------------------
Balance at March 31, 1997                        $      1,445    $        16,544     $         17,989
Current Period                                         (5,709)            15,319                9,610
                                               ---------------   ---------------   ------------------
Balance at June 30, 1997                         $     (4,264)    $       31,863     $         27,599
                                               ===============   ===============   ==================

Balance at March 31, 1998                        $      7,055    $        78,553     $         85,608
Current Period                                         (1,133)           (20,361)             (21,494)
                                               ---------------   ---------------   ------------------
Balance at June 30, 1998                         $      5,922    $        58,192     $         64,114
                                               ===============   ===============   ==================

</TABLE>

4.  SUBSEQUENT EVENTS

On July 6, 1998,  Joel San Antonio,  Warrantech'  Chairman  and Chief  Executive
Officer,  and William Tweed and Jeff J. White,  members of Warrantech's Board of
Directors,  exercised all of their vested options to purchase  Warrantech common
stock. A total of 3,000,000 shares are being purchased through the exercise.  It
is  anticipated   that  the  Company  will  receive  a  tax  benefit  from  this
transaction.


5.  EARNINGS PER SHARE

The  computation of earnings per share at June 30, 1998 and June 30, 1997 was as
follows:
 
                                             For the three months Ended June 30,
                                            ------------------------------------
                                                       1998                1997
                                                ------------       -------------
Numerator:
   Net (loss) income applicable
     to common stock                             $  (1,226,627)      $ 1,327,204
                                                ===============    =============

Denominator
    Average outstanding shares  used in the
    computation of per share earnings:
      Common Stock issued-Basic shares              13,362,303        13,176,344
      Stock Options (treasury method)                    -             2,485,217
                                                ---------------    -------------
      Diluted shares                                13,362,303        15,661,561
                                                ===============    =============
Earnings Per Common Share:
   Basic                                               $(.09)            $.10
   Diluted                                             $(.09)            $.08

In a net loss position option are anti-dilutive

                                        8

<PAGE>



                               WARRANTECH CORPORATION AND SUBSIDIARIES

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

Except for the historical  information  contained herein,  the matters discussed
below or elsewhere in this quarterly report are forward looking  statements that
involve  risks  and  uncertainties.  The  Company  makes  such  forward  looking
statements  under the  provisions  of the "safe  harbor"  section of the Private
Securities  Litigation Reform Act of 1995.  Forward looking statements are based
on  management's  beliefs  and  assumptions,  as well as  information  currently
available to management.  Such beliefs and assumptions are based on, among other
things, the Company's operating and financial  performance over recent years and
its  expectations  about its business for the current fiscal year.  Although the
Company  believes  that  the  expectations  reflected  in such  forward  looking
statements are reasonable,  it can give no assurance that such expectations will
prove to be correct. Such statements are subject to certain risks, uncertainties
and assumptions,  including (a) prevailing economic conditions may significantly
deteriorate,  thereby  reducing  the  demand  for  the  Company's  products  and
services,  (b) unavailability of technical support personnel or increases in the
rate of  turnover  of such  personnel,  reflecting  increased  demand  for  such
qualified  personnel,  (c)  changes in the terms or  availability  of  insurance
coverage  for  the  Company's  programs,  or (d)  regulatory  or  legal  changes
affecting the Company's  business,  although none of these risks are anticipated
at the  present  time.  Should  one or more  of  these  or any  other  risks  or
uncertainties materialize,  or should the underline assumptions prove incorrect,
actual  results  may  vary  materially  from  those  anticipated,  estimated  or
expected.

Results of Operations

Gross  revenues  for the three  months  ended June 30,  1998  decreased  5.1% to
$50,264,482  as compared  with  $53,327,030  for the three months ended June 30,
1997.  This decrease was primarily  attributable  to the  termination  of a high
volume,  low margin dealer  agreement and second,  the decline in unit prices in
computers and consumer electronic products.

The net increase in deferred  revenues for the three month period ended June 30,
1998 as compared with the same period a year ago is directly attributable to the
increased  number of service  contracts  sold with a service period greater than
one year during that period of time offset in part by amounts earned on expiring
contracts during the same period.

Direct costs are those costs directly  related to the production and acquisition
of service  contracts.  Direct costs were $36,535,216 or 72.7% of gross revenues
for the three months ended June 30, 1998 as compared with  $38,945,085  or 73.0%
for the comparable period last year. This decrease is attributable to the change
in mix of contracts sold and the termination of a high volume, low margin dealer
agreement.
 
Service,  selling and general and  administrative  expenses for the three months
ended June 30, 1998 were $14,176,847 or 28.2% of gross revenues as compared with
$11,314,775  or 21.2% for the same  period  last  year.  The  increases  in SG&A
expenses reflect an increase in expenses due to increased  temporary staffing of
technical  support staff in its call  centers.  The Company is in the process of
reengineering its= call center processes and systems  implementation with a goal
of improving operational efficiency.  These increases are also related to higher
payroll and payroll  related costs  resulting from the development of Help Desk,
Inc.


                                        9

<PAGE>


It is anticipated that the reengineering of call center processes will result in
improved  response time and decreased call processing time, and that the current
cost  initiatives  and  reengineered   processes  will  return  the  Company  to
profitability in the fiscal second quarter.

The increase in depreciation  and  amortization  for the three months ended June
30,  1998  compared  to the same  period  last  year is the  result  of  capital
additions  related to the Company=s ongoing up-grade of its computer systems and
the  additional  equipment  requirements  resulting from the increase in service
contracts in force.

The provision (benefit) for income taxes is based on the Company's projection of
its estimated effective tax rate for the fiscal year.

Liquidity and Financial Resources

The Company has an ongoing  relationship with equipment  financing companies and
intends to continue  financing  certain future  equipment  needs through leasing
transactions.  The total amount financed through leasing transactions during the
three month period ended June 30, 1998  amounted to $135,574.  The Company has a
line of credit with a bank which provides for a maximum  aggregate  borrowing up
to $10 million. The line of credit, which expires on August 31, 1998, is secured
by certain accounts  receivable.  At June 30, 1998, the Company did not have any
borrowing under the line of credit.

The Company  believes  that  internally  generated  funds will be  sufficient to
finance its current operations for at least the next twelve months. Cash used by
operations  during the three months ended June 30, 1998  amounted to  $2,904,060
which is principally attributable to payroll and payroll related costs resulting
from the increase in service levels to both new and existing accounts.

Management believes that there are significant  opportunities for growth through
acquisitions in the business services industry.  While there can be no assurance
that any transactions will materialize, to the extent that capital resources are
required in connection with any proposed transaction,  the Company believes that
it will be able to meet its needs  through a  combination  of available  cash on
hand,  borrowings  against  its  available  bank  credit  line,  and  additional
third-party  financing.  Based on discussions  with third  parties,  the Company
believes  such funding will be available to the Company if needed on  acceptable
terms, although such availability cannot be assured.
 
The  effect of  inflation  has not been  significant  to the  Company  since its
formation.


                                   10

<PAGE>


PART II.  Other Information


Item 1.       Legal Proceedings

              Not applicable.

Item 2.       Changes in Securities

              Not applicable.

Item 3.       Defaults Upon Senior Securities

              Not applicable.

Item 4.       Submission of Matters to Vote of Security Holders

              Not applicable.

Item 5.       Other Information

              Not applicable.

Item 6 (a)    Exhibits

              (27)   Financial Data Schedule

Item 6 (b)    Reports on 8-K

              None.



                                  11

<PAGE>

                                SIGNATURES


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



                                            WARRANTECH CORPORATION    


                                            S/N/S  Joel San Antonio
                                
                                  Joel San Antonio - Chairman of the Board
                                          (Chief Executive Officer)


Date:  August 13, 1998

                                             S/N/S  Richard F. Gavino
                         
                                   Richard F. Gavino - Executive Vice President
                                   and Chief Financial Officer


Date:  August 13, 1998




                                        12