<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q


(MARK ONE)
   |X|     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
           EXCHANGE ACT OF 1934

   For the quarterly period ended SEPTEMBER 30, 2005 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:             0-13124
                       ----------------------------------


                           COVER-ALL TECHNOLOGIES INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

            Delaware                                     13-2698053
------------------------------------       -------------------------------------
  (State or other jurisdiction of           (I.R.S. Employer Identification No.)
  incorporation or organization)


                 55 Lane Road, Fairfield, New Jersey     07004
--------------------------------------------------------------------------------
               (Address of principal executive offices) (Zip Code)


                                 (973) 461-5200
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


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

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 by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

As of November 1, 2005, the registrant had 16,559,823 shares of common stock,
par value $.01 per share, outstanding.

<PAGE>

COVER-ALL TECHNOLOGIES INC. AND SUBSIDIARY
--------------------------------------------------------------------------------

INDEX TO FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2005
--------------------------------------------------------------------------------


PART I:  FINANCIAL INFORMATION

ITEM 1.  Financial Statements

         Consolidated Balance Sheets as of September 30, 2005
         (Unaudited) and December 31, 2004 (Audited)......................   3

         Consolidated Statements of Operations for the three and nine
         months ended September 30, 2005 and 2004 (Unaudited).............   5

         Consolidated Statements of Cash Flows for the nine
         months ended September 30, 2005 and 2004 (Unaudited).............   6

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

ITEM 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations..............................  12

ITEM 3.  Qualitative and Quantitative Disclosures About
         Market Risk......................................................  17

ITEM 4.  Controls and Procedures..........................................  17

PART II: OTHER INFORMATION

ITEM 2.  Unregistered Sales of Equity Securities and Use of Proceeds......  19

ITEM 6.  Exhibits.........................................................  19

SIGNATURES................................................................  20



                                      . . . . . . . . . .



                                              2

<PAGE>
<TABLE>
<CAPTION>

PART I:  FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

COVER-ALL TECHNOLOGIES INC. AND SUBSIDIARY
-------------------------------------------------------------------------------------------------------------

CONSOLIDATED BALANCE SHEETS
-------------------------------------------------------------------------------------------------------------

                                                                          SEPTEMBER 30,      DECEMBER 31,
                                                                              2005               2004
                                                                        ----------------   ----------------
                                                                           (UNAUDITED)        (AUDITED)
<S>                                                                      <C>                <C>
ASSETS:
Current Assets:
   Cash and Cash Equivalents......................................       $      245,423     $      143,624
   Accounts Receivable (Less Allowance for Doubtful Accounts
      of $25,000 in 2005 and 2004, Respectively)..................            1,201,148          3,613,881
   Prepaid Expenses...............................................              555,519            427,991
                                                                        ----------------   ----------------
   Total Current Assets...........................................            2,002,090          4,185,496
                                                                        ----------------   ----------------
Property and Equipment - At Cost:
   Furniture, Fixtures and Equipment..............................              431,077          1,387,440
   Less:  Accumulated Depreciation................................             (169,774)        (1,257,774)
                                                                        ----------------   ----------------

   Property and Equipment - Net...................................              261,303            129,666
                                                                        ----------------   ----------------

Capitalized Software (Less Accumulated Amortization of
   $7,938,190 and $7,205,493 in 2005 and 2004, Respectively)......            1,668,782          1,883,448
                                                                        ----------------   ----------------

Deferred Financing Costs (Net of Accumulated Amortization of
   $137,473 and $111,619 in 2005 and 2004, Respectively)..........              103,838            129,692
                                                                        ----------------   ----------------

Other Assets......................................................              110,427             59,335
                                                                        ----------------   ----------------

   Total Assets...................................................       $    4,146,440     $    6,387,637
                                                                        ================   ================


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

                                                      3
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

COVER-ALL TECHNOLOGIES INC. AND SUBSIDIARY
-------------------------------------------------------------------------------------------------------------

CONSOLIDATED BALANCE SHEETS
-------------------------------------------------------------------------------------------------------------


                                                                          SEPTEMBER 30,      DECEMBER 31,
                                                                              2005               2004
                                                                        ----------------   ----------------
                                                                           (UNAUDITED)        (AUDITED)
<S>                                                                      <C>                <C>
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
   Accounts Payable...............................................       $      267,778     $      536,469
   Income Taxes Payable...........................................                   --             48,905
   Accrued Liabilities............................................              394,917            829,516
   Convertible Debentures ........................................              180,843            209,426
   Convertible Debenture - Related Party..........................                7,217             10,696
   Unearned Revenue...............................................            1,052,631          1,650,143
                                                                        ----------------   ----------------

   Total Current Liabilities......................................            1,903,386          3,285,155
                                                                        ----------------   ----------------
Long-Term Liabilities:
   Deferred Charges...............................................              126,019                 --
   Convertible Debentures.........................................            1,910,250          2,091,092
   Convertible Debenture - Related Party..........................               76,234             83,451
                                                                        ----------------   ----------------

   Total Long-Term Liabilities....................................            2,112,503          2,174,543
                                                                        ----------------   ----------------

   Total Liabilities..............................................            4,015,889          5,459,698
                                                                        ----------------   ----------------

Commitments and Contingencies.....................................                   --                 --
                                                                        ----------------   ----------------
Stockholders' Equity:
   Common Stock, $.01 Par Value, Authorized 75,000,000 Shares;
     19,059,823 and 18,248,084 Shares Issued and
     16,559,823 and 15,748,084 Shares Outstanding in 2005 and
     2004, Respectively...........................................              190,598            182,481

Capital In Excess of Par Value....................................           26,499,240         26,265,976

Accumulated Deficit...............................................          (25,856,287)       (24,817,518)

Treasury Stock - At Cost - 2,500,000 Shares.......................             (703,000)          (703,000)
                                                                        ----------------   ----------------

Total Stockholders' Equity........................................              130,551            927,939
                                                                        ----------------   ----------------

Total Liabilities and Stockholders' Equity........................       $    4,146,440     $    6,387,637
                                                                        ================   ================


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

                                                      4
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

COVER-ALL TECHNOLOGIES INC. AND SUBSIDIARY
--------------------------------------------------------------------------------------------------------------------

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
--------------------------------------------------------------------------------------------------------------------

                                                           THREE MONTHS ENDED               NINE MONTHS ENDED
                                                              SEPTEMBER 30,                    SEPTEMBER 30,
                                                      ----------------------------     ----------------------------
                                                          2005            2004             2005             2004
                                                      ------------    ------------     ------------    ------------
<S>                                                   <C>             <C>              <C>             <C>
REVENUES:
     Licenses....................................     $    150,866    $    240,106     $    849,954    $  1,027,114
     Maintenance.................................          901,033       1,059,753        2,841,784       3,362,243
     Professional Services.......................          245,902         185,575          856,158         608,836
     Applications Service Provider ("ASP")
        Services.................................          340,500         154,198          890,250         462,594
                                                      ------------    ------------     ------------    ------------
     TOTAL REVENUES..............................        1,638,301       1,639,632        5,438,146       5,460,787
                                                      ------------    ------------     ------------    ------------
COST OF REVENUES:
     Licenses....................................          348,772         353,658        1,149,446       1,022,824
     Maintenance.................................          710,681         690,223        2,169,615       2,060,578
     Professional Services.......................          129,930         102,845          365,272         332,597
     ASP Services................................           52,990          22,552          116,995          65,199
                                                      ------------    ------------     ------------    ------------
     TOTAL COST OF REVENUES......................        1,242,373       1,169,278        3,801,328       3,481,198
                                                      ------------    ------------     ------------    ------------
     DIRECT MARGIN...............................          395,928         470,354        1,636,818       1,979,589
                                                      ------------    ------------     ------------    ------------
OPERATING EXPENSES:
     Sales and Marketing.........................          317,163         249,278          989,646         919,256
     General and Administrative..................          320,989         327,274          948,401         915,076
     Research and Development....................          229,962         194,151          638,456         507,065
                                                      ------------    ------------     ------------    ------------
     TOTAL OPERATING EXPENSES....................          868,114         770,703        2,576,503       2,341,397
                                                      ------------    ------------     ------------    ------------
     OPERATING INCOME (LOSS).....................         (472,186)       (300,349)        (939,685)       (361,808)
                                                      ------------    ------------     ------------    ------------
OTHER INCOME (EXPENSE):
     Interest Expense............................          (45,447)        (48,014)        (137,938)       (143,751)
     Interest Expense - Related Party............           (1,787)         (1,977)          (5,691)         (5,966)
     Interest Income.............................            2,113             320            9,879           3,812
     Other Income................................               --              --           34,666              --
                                                      ------------    ------------     ------------    ------------
     TOTAL OTHER INCOME (EXPENSE)................          (45,121)        (49,671)         (99,084)       (145,905)
                                                      ------------    ------------     ------------    ------------
     INCOME (LOSS) BEFORE INCOME TAXES
        (BENEFIT)................................         (517,307)       (350,020)      (1,038,769)       (507,713)
                                                      ------------    ------------     ------------    ------------
INCOME TAXES (BENEFIT)...........................               --              --               --              --
                                                      ------------    ------------     ------------    ------------
NET INCOME (LOSS)................................     $   (517,307)   $   (350,020)    $ (1,038,769)   $   (507,713)
                                                      ============    ============     ============    ============
BASIC EARNINGS (LOSS) PER COMMON SHARE...........     $      (0.03)   $      (0.02)    $      (0.06)   $      (0.03)
                                                      ============    ============     ============    ============
DILUTED EARNINGS (LOSS) PER COMMON SHARE.........     $      (0.03)   $      (0.02)    $      (0.06)   $      (0.03)
                                                      ============    ============     ============    ============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
     OUTSTANDING FOR BASIC EARNINGS (LOSS) PER
     COMMON SHARE................................       16,240,000      15,618,000       16,000,000      15,445,000
                                                      ============    ============     ============    ============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
     OUTSTANDING FOR DILUTED EARNINGS (LOSS) PER
     COMMON SHARE................................       16,240,000      15,618,000       16,000,000      15,445,000
                                                      ============    ============     ============    ============


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

                                                          5
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

COVER-ALL TECHNOLOGIES INC. AND SUBSIDIARY
-------------------------------------------------------------------------------------------------------------------

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
-------------------------------------------------------------------------------------------------------------------

                                                                                  NINE MONTHS ENDED SEPTEMBER 30,
                                                                                ----------------------------------
                                                                                     2005                2004
                                                                                --------------      --------------
<S>                                                                              <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net Income (Loss)....................................................       $ (1,038,769)       $   (507,713)
     Adjustments to Reconcile Net Income (Loss) to
        Net Cash Provided From (Used For) Operating Activities:
            Depreciation..................................................             77,766              59,774
            Amortization of Capitalized Software..........................            732,698             737,737
            Amortization of Deferred Financing Costs......................             25,855              25,854
     Changes in Assets and Liabilities:
        (Increase) Decrease in:
            Accounts Receivable...........................................          2,412,733             897,705
            Prepaid Expenses..............................................           (127,527)            (90,003)
            Other Receivable..............................................                 --              (4,691)
            Other Assets..................................................            (51,092)                 --
        Increase (Decrease) in:
            Accounts Payable..............................................           (268,691)            333,156
            Taxes Payable.................................................            (48,905)                 --
            Accrued Liabilities...........................................           (434,601)            (11,723)
            Unearned Revenue..............................................           (597,512)         (1,355,655)
            Deferred Charges..............................................            126,019                  --
                                                                                --------------      --------------
     Net Cash Provided From (Used For) Operating Activities...............            807,974              84,441
                                                                                --------------      --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Capital Expenditures................................................            (209,403)            (73,118)
     Capitalized Software Expenditures...................................            (518,032)           (823,390)
                                                                                --------------      --------------
     Net Cash Provided From (Used For) Investing Activities..............            (727,435)           (896,508)
                                                                                --------------      --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from Exercise of Stock Options.............................              21,260               7,713
                                                                                --------------      --------------
     Net Cash Provided From (Used For) Financing Activities..............              21,260               7,713
                                                                                --------------      --------------

CHANGE IN CASH AND CASH EQUIVALENTS......................................             101,799            (804,354)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD..........................             143,624           1,193,173
                                                                                --------------      --------------
CASH AND CASH EQUIVALENTS - END OF PERIOD................................        $    245,423        $    388,819
                                                                                ==============      ==============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
CASH PAID DURING THE PERIODS FOR:
     Interest............................................................             137,938             143,751
     Interest - Related Party............................................               5,691               5,966
     Income Taxes........................................................                  --                  --


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

                                                         6
</TABLE>

<PAGE>

COVER-ALL TECHNOLOGIES INC. AND SUBSIDIARY
--------------------------------------------------------------------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

[1] GENERAL

For a summary of significant accounting policies, refer to Note 1 of Notes to
Consolidated Financial Statements included in Cover-All Technologies Inc.'s (the
"Company") Annual Report on Form 10-K for the year ended December 31, 2004.
While the Company believes that the disclosures herein presented are adequate to
make the information not misleading, these consolidated financial statements
should be read in conjunction with the consolidated financial statements and the
notes thereto included in the Company's latest annual report. Certain amounts
for the prior period have been reclassified to conform with the current period's
financial statement presentation. The financial statements include on a
consolidated basis the results of its subsidiary. All material intercompany
transactions and balances have been eliminated.

In the opinion of management, the accompanying consolidated financial statements
include all adjustments which are necessary to present fairly the Company's
consolidated financial position as of September 30, 2005, and the results of
their operations for the three and nine month periods ended September 30, 2005
and 2004, and their cash flows for the nine month periods ended September 30,
2005 and 2004. Such adjustments are of a normal and recurring nature. The
results of operations for the three and nine month periods ended September 30,
2005 and 2004 are not necessarily indicative of the results to be expected for a
full year.

[2] CONVERTIBLE DEBENTURES

In 2001 and 2002, we completed two rounds of debt financing through the sale of
8% convertible debentures due in 2008 ("2008 Debentures") and 2009 ("2009
Debentures"), respectfully, to Renaissance US Growth & Income Trust PLC, BFSUS
Special Opportunities Trust PLC and certain other investors (including John
Roblin, our Chairman of the Board, President and Chief Executive Officer), with
an aggregate principal amount of $2,500,000. Interest on the unpaid principal
amount of the debentures is payable monthly at the rate of 8% per annum. The
2008 Debentures mature on July 1, 2008 and the 2009 Debentures mature on
September 1, 2009, unless the debentures are earlier redeemed by us or the
holder or converted into shares of our common stock at the holder's option at a
conversion price of $0.30 per share, subject to adjustment. We may redeem the
debentures for cash at 101% of the principal amount, together with accrued and
unpaid interest through the redemption date, upon the occurrence of certain
events specified in the debentures. The related financing costs incurred of
$187,090 in connection with establishing these debentures have been deferred and
are being amortized over the life of the debt. We are required to repay
principal on the 2008 Debentures and 2009 Debentures, commencing July 1, 2004
and July 1, 2005, respectively, in monthly installments of ten dollars ($10) per
thousand dollars ($1,000) of the then remaining principal amount. In 2004, the
holders of the 2008 Debentures elected to convert all of their monthly principal
installments due in 2004, totaling $105,335, under such debentures into shares
of our common stock at the conversion price of $0.30 per share in lieu of
receiving such installment payments in cash. In connection with this conversion,
we issued to the holders of the 2008 Debentures an aggregate of 351,116 shares
of our common stock. We made an aggregate of $155,000 of interest payments on
the debentures in the nine months ended September 30, 2005.

In March 2002, the holders under the convertible loan agreements governing the
issuance of the debentures agreed to amend one of the financial covenants for
the quarters ending March 31, June 30 and September 30, 2002. As consideration
for such amendments, we issued to such holders an aggregate of 128,572 warrants
to purchase such number of shares of our common stock at an exercise price of
$0.22 per share. The warrants expire in 2007 and became exercisable in equal
monthly installments on each of March 31, 2002, June 30, 2002 and September 30,
2002. The $16,913 estimated fair market value of the warrants has been charged
to financing costs.

As of September 30, 2005, we were in compliance with the financial covenants of
the convertible loan agreements.

                                       7
<PAGE>

COVER-ALL TECHNOLOGIES INC. AND SUBSIDIARY
--------------------------------------------------------------------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

At September 30, 2005, principal payments due on the convertible debentures were
as follows:

    2006.................................................    $   188,060
    2007.................................................        225,694
    2008.................................................      1,278,173
    Thereafter...........................................        482,616
                                                             -----------

           TOTAL.........................................    $ 2,174,543
                                                             ===========

In May 2005, the holders of the 2008 Debentures converted an aggregate of
$99,171 in principal of such debentures into a total of 330,570 shares of our
common stock at the conversion price of $0.30 per share. In September 2005, the
holders of the 2008 Debentures and 2009 Debentures converted an aggregate of
$120,951 in principal of such debentures into a total of 403,169 shares of our
common stock at the conversion price of $0.30 per share.

[3] EARNINGS PER SHARE DISCLOSURES

The following is a reconciliation of the numerators and denominators of the
basic and diluted earnings per share ("EPS") computations:

<TABLE>
<CAPTION>
                                                                      FOR THE THREE MONTHS ENDED
                                                                          SEPTEMBER 30, 2005
                                                           -------------------------------------------------
                                                               INCOME           SHARES         PER SHARE
                                                             (NUMERATOR)     (DENOMINATOR)       AMOUNT
                                                           ---------------  ---------------  ---------------
<S>                                                         <C>                 <C>           <C>
Basic EPS:
 Income (Loss) Available to Common
   Stockholders......................................       $   (517,307)       16,239,917    $       (0.03)
Interest Reversal Convertible Debentures
  (Net of Tax).......................................                 --                --               --
Effect of Dilutive Securities:
  Exercise of Options................................                 --                --               --
  Exercise of Warrants...............................                 --                --               --
  Conversion of Convertible Debentures...............                 --                --               --
                                                           ---------------  ---------------  ---------------
Diluted EPS:
  Income (Loss) Available to Common Stockholders
    Plus Assumed Conversions.........................       $   (517,307)       16,239,917    $       (0.03)
                                                           ===============  ===============  ===============
</TABLE>


                                       8

<PAGE>

COVER-ALL TECHNOLOGIES INC. AND SUBSIDIARY
--------------------------------------------------------------------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                      FOR THE NINE MONTHS ENDED
                                                                         SEPTEMBER 30, 2005
                                                           -------------------------------------------------
                                                               INCOME           SHARES         PER SHARE
                                                             (NUMERATOR)     (DENOMINATOR)       AMOUNT
                                                           ---------------  ---------------  ---------------
<S>                                                         <C>                 <C>           <C>
Basic EPS:
 Income (Loss) Available to Common
   Stockholders......................................       $ (1,038,769)       16,000,385    $       (0.06)
 Interest Reversal Convertible Debentures
   (Net of Tax)......................................                 --                --               --
Effect of Dilutive Securities:
  Exercise of Options................................                 --                --               --
  Exercise of Warrants...............................                 --                --               --
  Conversion of Convertible Debentures...............                 --                --               --
                                                           ---------------  ---------------  ---------------
Diluted EPS:
  Income (Loss) Available to Common Stockholders
    Plus Assumed Conversions.........................       $ (1,038,769)       16,000,385    $       (0.06)
                                                           ===============  ===============  ===============
</TABLE>

The Company's options and warrants were not included in the computation of EPS
for the periods ended September 30, 2005 because to do so would be antidilutive.
The Company's convertible debt does not affect the EPS calculation for the
periods ended September 30, 2005 because it would be antidilutive.

<TABLE>
<CAPTION>
                                                                     FOR THE THREE MONTHS ENDED
                                                                         SEPTEMBER 30, 2004
                                                           -------------------------------------------------
                                                               INCOME           SHARES         PER SHARE
                                                             (NUMERATOR)     (DENOMINATOR)       AMOUNT
                                                           ---------------  ---------------  ---------------
<S>                                                         <C>                 <C>           <C>
Basic EPS:
 Income (Loss) Available to Common
   Stockholders......................................       $   (350,020)       15,617,749    $       (0.02)
Interest Reversal Convertible Debentures
  (Net of Tax).......................................                 --                --               --
Effect of Dilutive Securities:
  Exercise of Options................................                 --                --               --
  Exercise of Warrants...............................                 --                --               --
  Conversion of Convertible Debentures...............                 --                --               --
                                                           ---------------  ---------------  ---------------
Diluted EPS:
  Income (Loss) Available to Common Stockholders
    Plus Assumed Conversions.........................       $   (350,020)       15,617,749    $       (0.02)
                                                           ===============  ===============  ===============
</TABLE>


                                       9
<PAGE>

COVER-ALL TECHNOLOGIES INC. AND SUBSIDIARY
--------------------------------------------------------------------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                      FOR THE NINE MONTHS ENDED
                                                                         SEPTEMBER 30, 2004
                                                           -------------------------------------------------
                                                               INCOME           SHARES         PER SHARE
                                                             (NUMERATOR)     (DENOMINATOR)       AMOUNT
                                                           ---------------  ---------------  ---------------
<S>                                                         <C>                 <C>           <C>
Basic EPS:
 Income (Loss) Available to Common
   Stockholders......................................       $   (507,713)       15,445,160    $       (0.03)
 Interest Reversal Convertible Debentures
   (Net of Tax)......................................                 --                --               --
Effect of Dilutive Securities:
  Exercise of Options................................                 --                --               --
  Exercise of Warrants...............................                 --                --               --
  Conversion of Convertible Debentures...............                 --                --               --
                                                           ---------------  ---------------  ---------------
Diluted EPS:
  Income (Loss) Available to Common Stockholders
    Plus Assumed Conversions.........................       $   (507,713)       15,445,160    $       (0.03)
                                                           ===============  ===============  ===============
</TABLE>

The Company's options and warrants were not included in the computation of EPS
for the periods ended September 30, 2004 because to do so would be antidilutive.
The Company's convertible debt does not affect the EPS calculation for the
periods ended September 30, 2004 because it would be antidilutive.

[4] STOCK OPTION AND STOCK PURCHASE PLANS

We have adopted several stock-based compensation plans that provide for the
grant of options to our employees and non-employee directors. All options under
these plans vest over terms of zero to three years. Options may be granted as
incentive or non-qualified stock options and are exercisable at a price and time
as determined by the Board of Directors on the grant date.

We account for stock-based employee compensation using the intrinsic value
method in accordance with APB Opinion No. 25 and related interpretations which
generally require that the amount of compensation cost that must be recognized,
if any, is the quoted market price of the stock on the measurement date, which
is generally the grant date, less the amount the grantee is required to pay to
acquire the stock. Alternatively, Statement of Financial Standards (SFAS) No.
123, "Accounting for Stock-Based Compensation," employs fair value-based
measurement and generally results in the recognition of compensation expense for
all stock-based awards to employees. SFAS No. 123 does not require an entity to
adopt those provisions, but, rather, permits continued application of APB
Opinion No. 25. We have elected not to adopt the recognition and measurement
provisions of SFAS No. 123 and continue to account for our stock-based employee
compensation plans under APB Opinion No. 25 and related interpretations. In
accordance with APB Opinion No. 25, compensation is generally recorded for
stock-based employee compensation grants based on the excess of the market value
of the common stock on the measurement date over the exercise price. If the
exercise price of the stock-based compensation is equal to or exceeds the market
price of our common stock on the grant date, no compensation expense is
recorded.

For the three and nine months ended September 30, 2005 and 2004, the Company was
not required to record compensation expense for stock option grants.

Had compensation cost for the stock-based employee compensation plans been
determined based on the fair values of awards on the grant date, estimated using
the Black-Scholes option pricing model, which would be consistent with the
method described in SFAS No. 123, the Company's reported net income (loss) and
earnings (loss) per share would have been reduced to the pro forma amounts shown
below:

                                       10
<PAGE>

COVER-ALL TECHNOLOGIES INC. AND SUBSIDIARY
--------------------------------------------------------------------------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED SEPTEMBER 30,
                                                                ----------------------------------------
                                                                        2005                 2004
                                                                -------------------  -------------------
                                                                (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                                                 <C>                   <C>
Net Income (Loss) as Reported...........................            $      (517)          $     (350)
Deduct:  Amount by which stock-based employee
         compensation as determined under fair value
         based method for all awards exceeds the
         compensation as determined under the
         intrinsic value method.........................            $       (26)          $      (25)
Pro Forma Net Income (Loss).............................            $      (543)          $     (375)
Basic Earnings (Loss) Per Share as Reported.............            $     (0.03)          $    (0.02)
Pro Forma Basic Earnings (Loss) Per Share...............            $     (0.03)          $    (0.02)
Diluted Earnings (Loss) Per Share as Reported...........            $     (0.03)          $    (0.02)
Pro Forma Diluted Earnings (Loss) Per Share.............            $     (0.03)          $    (0.02)



                                                                      NINE MONTHS ENDED SEPTEMBER 30,
                                                                ----------------------------------------
                                                                        2005                 2004
                                                                -------------------  -------------------
                                                                (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Net Income (Loss) as Reported...........................            $    (1,039)          $     (508)
Deduct:  Amount by which stock-based employee
         compensation as determined under fair value
         based method for all awards exceeds the
         compensation as determined under the
         intrinsic value method.........................            $       (77)          $      (75)
Pro Forma Net Income (Loss).............................            $    (1,116)          $     (583)
Basic Earnings (Loss) Per Share as Reported.............            $     (0.06)          $    (0.03)
Pro Forma Basic Earnings (Loss) Per Share...............            $     (0.07)          $    (0.04)
Diluted Earnings (Loss) Per Share as Reported...........            $     (0.06)          $    (0.03)
Pro Forma Diluted Earnings (Loss) Per Share.............            $     (0.07)          $    (0.04)
</TABLE>

In December 2004, the FASB issued SFAS No. 123 (Revised 2004) "SHARE-BASED
PAYMENT." The statement requires that the compensation cost relating to
share-based payment transactions be recognized in financial statements. That
cost will be measured based on the fair value of the equity or liability
instrument issued. The statement covers a wide range of share-based compensation
arrangements including share options, restricted share plans, performance-based
awards, share appreciation rights, and employee share purchase plans. The
Company will be required to adopt SFAS 123 (R) as of January 1, 2006. The
adoption of this statement is not expected to have a material impact on the
consolidated financial statements of the Company.


                                       11

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

ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

        CERTAIN OF THE MATTERS DISCUSSED IN THIS REPORT, INCLUDING, WITHOUT
LIMITATION, MATTERS DISCUSSED UNDER THIS ITEM 2, "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS," MAY CONSTITUTE
FORWARD-LOOKING STATEMENTS (AS SUCH TERM IS DEFINED IN THE PRIVATE SECURITIES
LITIGATION REFORM ACT) AND ARE SUBJECT TO THE OCCURRENCE OF CERTAIN
CONTINGENCIES WHICH MAY NOT OCCUR IN THE TIME FRAMES ANTICIPATED OR OTHERWISE,
AND, AS A RESULT, COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM SUCH
STATEMENTS. IN ADDITION TO OTHER FACTORS AND MATTERS DISCUSSED ELSEWHERE IN THIS
REPORT ON FORM 10-Q AND IN OUR FORM 10-K FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION ON MARCH 25, 2005, AND OTHER PERIODIC REPORTS FILED, THESE RISKS,
UNCERTAINTIES AND CONTINGENCY INCLUDE, BUT ARE NOT LIMITED TO, RISKS ASSOCIATED
WITH INCREASED COMPETITION, CUSTOMER DECISIONS, THE SUCCESSFUL COMPLETION OF
CONTINUING DEVELOPMENT OF NEW PRODUCTS, THE SUCCESSFUL NEGOTIATION, EXECUTION
AND IMPLEMENTATION OF ANTICIPATED NEW SOFTWARE CONTRACTS, THE SUCCESSFUL
ADDITION OF PERSONNEL IN THE MARKETING AND TECHNICAL AREAS AND OUR ABILITY TO
COMPLETE DEVELOPMENT AND SELL AND LICENSE OUR PRODUCTS AT PRICES WHICH RESULT IN
SUFFICIENT REVENUES TO REALIZE PROFITS, AND OTHER BUSINESS FACTORS BEYOND OUR
CONTROL.

OVERVIEW

        We are a supplier of software products for the property and casualty
insurance industry, supplying a wide range of professional services that support
product customization, conversion from existing systems and data integration
with other software or reporting agencies. We also offer on-going support
services including incorporating recent insurance rate and rule changes in our
solutions. These support services also include analyzing the changes,
developments, quality assurance, documentation and distribution of insurance
rate and rule changes.

        We earn revenue from software contract licenses, service fees from ASPs,
continuing maintenance fees for servicing the product and professional services.
Total revenue for the three and nine months ended September 30, 2005 remained
relatively constant at $1,638,000 and $5,438,000, respectively, from $1,640,000
and $5,461,000, respectively, for the three and nine months ended September 30,
2004, where increases in our ASP and professional services revenue were offset
by decreases in license and maintenance revenue.

        The following is an overview of the key components of our revenue and
other important financial data for the three and nine months ended September 30,
2005:

        SOFTWARE LICENSES. Our license revenue in the three and nine months
ended September 30, 2005 decreased to $151,000 and $850,000, respectively, from
$240,000 and $1,027,000, respectively, for the three and nine months ended
September 30, 2004.

        MAINTENANCE. The decrease in maintenance revenue, to $901,000 and
$2,842,000, respectively, in the three and nine months ended September 30, 2005,
from $1,060,000 and $3,362,000, respectively, in the same periods in 2004,
resulted in part from the loss of a few customers and implementation delays for
some customers upgrading to the new software, which delayed maintenance billing
for their new software capabilities.

        PROFESSIONAL SERVICES. The increase in professional services revenue, to
$246,000 and $856,000, respectively, in the three and nine months ended
September 30, 2005 from $186,000 and $609,000, respectively, in the same periods
of 2004, was a result of increased demand for new software capabilities and
customizations from our current customer base.

        ASP SERVICES. ASP services revenue increased to $340,000 and $890,000,
respectively, in the three and nine months of 2005 from $154,000 and $463,000,
respectively, in the same periods in 2004, due to an expanded and extended
contractual relationship with a very large customer.

        INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES (BENEFIT). Income (loss)
before provision for income taxes (benefits) was $(517,000) and $(1,039,000),
respectively, in the three and nine months ended September 30, 2005 compared to
$(350,000) and $(508,000), respectively, in the same periods of 2004, primarily
due to a reduction in license and maintenance revenue.

                                       12
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--------------------------------------------------------------------------------

        NET INCOME (LOSS). Net income (loss) for the three and nine months ended
September 30, 2005 decreased to $(517,000) and $(1,039,000), respectively, from
$(350,000) and $(508,000), respectively, in the same periods of 2004 as a result
of a reduction in license and maintenance revenue.

        CASH FLOW. We generated $808,000 in positive cash flow from operations
in the first nine months of 2005 and ended the period with $245,000 in cash and
cash equivalents and $1,201,000 in accounts receivable.

        We continue to face challenges to growth in 2005, mainly in the
marketing and selling of our products and services to new customers, caused by a
number of factors, including long sales cycles and competition. In addition,
there are risks related to customers' acceptance and implementation delays which
could affect the timing and amount of license revenue we are able to recognize.

        However, given the positive response to our new software from existing
customers, the significant expansion of our relationship with a very large
customer and the introduction of additional software capabilities, we are
expanding our sales and marketing efforts to both new and existing customers.
Consequently, we are incurring additional sales and marketing expense in advance
of generating the corresponding revenue.

RESULTS OF OPERATIONS

        The following table sets forth, for the periods indicated, certain items
from the consolidated statements of operations expressed as a percentage of
total revenues:

<TABLE>
<CAPTION>
                                                           THREE MONTHS                   NINE MONTHS
                                                        ENDED SEPTEMBER 30,           ENDED SEPTEMBER 30,
                                                   ----------------------------   ----------------------------
                                                       2005            2004           2005            2004
                                                   ------------    ------------   ------------    ------------
<S>                                                <C>             <C>            <C>             <C>
REVENUES:
         License                                        9.2%           14.7%          15.6%           18.8%
         Maintenance                                   55.0            64.6           52.3            61.6
         Professional Services                         15.0            11.3           15.7            11.1
         Applications Service Provider ("ASP")
           Services                                    20.8             9.4           16.4             8.5
                                                   ------------    ------------   ------------    ------------
         TOTAL REVENUES                               100.0           100.0          100.0           100.0
                                                   ------------    ------------   ------------    ------------

COST OF REVENUES:
         License                                       21.3            21.5           21.1            18.7
         Maintenance                                   43.4            42.1           39.9            37.7
         Professional Services                          7.9             6.3            6.7             6.1
         ASP Services                                   3.2             1.4            2.2             1.2
                                                   ------------    ------------   ------------    ------------
         TOTAL COST OF REVENUES                        75.8            71.3           69.9            63.7
                                                   ------------    ------------   ------------    ------------
         DIRECT MARGIN                                 24.2            28.7           30.1            36.3
                                                   ------------    ------------   ------------    ------------

OPERATING EXPENSES:
         Sales and Marketing                           19.4            15.2           18.2            16.8
         General and Administrative                    19.6            20.0           17.4            16.8
         Research and Development                      14.0            11.8           11.8             9.3
                                                   ------------    ------------   ------------    ------------
         TOTAL OPERATING EXPENSES                      53.0            47.0           47.4            42.9
                                                   ------------    ------------   ------------    ------------
         OPERATING INCOME (LOSS)                      (28.8)          (18.3)         (17.3)           (6.6)
                                                   ------------    ------------   ------------    ------------

OTHER EXPENSE (INCOME):
         Interest Expense                              (2.9)           (3.0)          (2.6)           (2.8)
         Interest Income                                0.1              --            0.2             0.1
         Other Income                                    --              --            0.6              --
                                                   ------------    ------------   ------------    ------------
</TABLE>

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

<TABLE>
<CAPTION>
<S>                                                <C>             <C>            <C>             <C>
         TOTAL OTHER EXPENSE (INCOME)                   (2.8)           (3.0)           (1.8)          (2.7)
                                                   ------------    ------------   ------------    ------------
         INCOME (LOSS) BEFORE INCOME TAXES             (31.6)          (21.3)          (19.1)          (9.3)
                                                   ------------    ------------   ------------    ------------

INCOME TAXES (BENEFIT)                                    --              --              --             --
                                                   ------------    ------------   ------------    ------------

NET INCOME (LOSS)                                      (31.6)%         (21.3)%         (19.1)%         (9.3)%
                                                   ------------    ------------   ------------    ------------
</TABLE>

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 COMPARED TO THREE AND NINE MONTHS
ENDED SEPTEMBER 30, 2004

        Total revenues for the three months ended September 30, 2005 were
$1,638,000 as compared to $1,640,000 for the same period in 2004. License fees
were $151,000 for the three months ended September 30, 2005 compared to $240,000
in the same period in 2004 as a result of delayed upgrade decisions by a few
existing customers, no new customer sales and fewer sales to existing customers
in 2005. For the three months ended September 30, 2005, maintenance revenues
were $901,000 compared to $1,060,000 in the same period of the prior year, due
in part to the loss of a few customers and implementation delays for some
customers upgrading to the new software, which delayed maintenance billing for
their new software capabilities. For the three months ended September 30, 2005,
ASP revenues were $340,000 as compared to $154,000 in the same period for the
prior year, due to an expanded and extended contractual relationship with a very
large customer.

        Professional services revenue increased to $246,000 in the three months
ended September 30, 2005 compared to $186,000 in the third quarter of 2004, as a
result of increased demand for new software capabilities and customizations from
our current customer base.

        For the nine months ended September 30, 2005, total revenues were
$5,438,000 compared to $5,461,000 in the same period of the prior year.

        Cost of sales increased to $1,242,000 and $3,801,000 for the three and
nine months ended September 30, 2005 as compared to $1,169,000 and $3,481,000
for the same periods in 2004, due to staff-related expenses. Non-cash
capitalized software amortization was $239,000 and $733,000 for the three and
nine months ended September 30, 2005 as compared to $251,000 and $738,000 for
the same periods in 2004. We capitalized $148,000 and $518,000 of software
development costs in the three and nine months ended September 30, 2005 as
compared to $229,000 and $823,000 in the same periods in 2004.

        Research and development expenses increased to $230,000 and $638,000 for
the three and nine months ended September 30, 2005 from $194,000 and $507,000
for the same periods in 2004, primarily due to the ongoing effort to enhance the
functionality of our products and solutions.

        Sales and marketing expenses increased to $317,000 and $990,000 for the
three and nine months ended September 30, 2005 from $249,000 and $919,000 in the
same periods of 2004, primarily due to an increase in a marketing and sales
effort to improve the market share of our solution set.

        General and administrative expenses were $321,000 and $948,000 in the
three and nine months ended September 30, 2005 as compared to $327,000 and
$915,000 in the same periods in 2004. The increase in the general and
administrative expenses for the nine months ended September 30, 2005 from the
same period of 2004 was mainly due to directors fees paid and an increase in
legal fees in 2005.

LIQUIDITY AND CAPITAL RESOURCES

        We have funded our operations primarily from cash flow from operations
and the proceeds from our 2008 Debentures and 2009 Debentures. Cash from
operations results primarily from net income from the income

                                       14
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COVER-ALL TECHNOLOGIES INC. AND SUBSIDIARY
--------------------------------------------------------------------------------

statement less non-cash expenses (depreciation and amortization) and changes in
working capital from the balance sheet. The Company's largest source of
operating cash flows is cash collections from its customers following the
purchase or renewal of software licenses, product support agreements and other
related services. Payments from customers for software licenses are generally
received at the beginning of the contract term. Payments from customers for
product support and application services provider ("ASP") services are generally
received in advance on a quarterly basis. Payments for professional services are
generally received 30 days after the services are performed.

        At September 30, 2005, we had cash and cash equivalents of $245,000
compared to cash and cash equivalents of $389,000 at September 30, 2004. The
decrease in cash and cash equivalents is primarily attributable to the decrease
in license sales and maintenance revenues.

        The 2008 Debentures were issued with an aggregate principal amount of
$1,800,000, and the 2009 Debentures were issued with an aggregate principal
amount of $700,000. Interest on the unpaid principal amount of the debentures is
payable monthly at the rate of 8% per annum. The 2008 Debentures and 2009
Debentures mature on July 1, 2008 and September 1, 2009, respectively, unless
the debentures are earlier redeemed by us or the holder upon the occurrence of
certain events specified in the debentures or converted into shares of our
common stock at the holder's option at a conversion price of $0.30 per share,
subject to adjustment. We may redeem the debentures for cash at 101% of the
principal amount, together with accrued and unpaid interest through the
redemption date, upon the occurrence of certain events specified in the
debentures.

        We are required to pay, commencing on July 1, 2004 and July 1, 2005,
respectively, monthly principal installments in the amount of ten dollars ($10)
per thousand dollars ($1,000) of the then remaining principal amount of such
debentures, and at maturity we will be required to pay the remaining unpaid
principal amount.

        In 2004, the holders of the 2008 Debentures elected to convert an
aggregate of $105,335 in principal of such debentures, representing their
monthly installments of principal under such debentures (in lieu of receiving
such installment payments in cash) for shares of our common stock at the
conversion price of $0.30 per share.

        In May 2005, the holders of the 2008 Debentures elected to convert an
aggregate of $99,171 in principal of such debentures, representing their monthly
installments of principal under such debentures (in lieu of receiving such
installment payments in cash), for shares of our common stock at the conversion
price of $0.30 per share. In September 2005, the holders of the 2008 Debentures
and 2009 Debentures elected to convert an aggregate of $120,951 in principal of
such debentures representing their monthly installments of principal under such
debentures (in lieu of receiving such installment payments in cash) for shares
of our common stock at the conversion price of $0.30 per share. At September 30,
2005, after giving effect to the conversion, the 2008 Debentures and 2009
Debentures have an aggregate outstanding principal amount of $2,174,544.

        At September 30, 2005, we had working capital of $99,000 compared to a
working capital deficit of $(444,000) at September 30, 2004. This increase in
our working capital resulted primarily from an increase in cash provided from
operating activities. For the nine months ended September 30, 2005, net cash
provided from (used for) operating activities totaled approximately $808,000
compared to approximately $84,000 for the nine months ended September 30, 2004.
In 2005, cash flow from operating activities represented the Company's principal
source of cash and results primarily from net income (loss), less non-cash
expense and changes in working capital. The Company had a significant increase
in its accounts receivable due to the license sale to one large customer offset
by non-cash expenses and payment of liabilities.

        For the nine months ended September 30, 2005, net cash used for
investing activities was approximately $727,000 compared to approximately
$897,000 for the nine months ended September 30, 2004. The Company expects
capital expenditures and capital software expenditures to continue to be funded
by cash generated from operations.

        For the nine months ended September 30, 2005, net cash provided from
financing activities was approximately $21,000 compared to approximately $8,000
for the nine months ended September 30, 2004. The cash provided from financing
activities in 2005 and 2004 consisted of proceeds from the exercise of stock
options.

                                       15
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        At December 31, 2004, we had approximately $21,900,000 of federal net
operating tax loss carryforwards expiring at various dates through 2023. The Tax
Reform Act of 1986 enacted a complex set of rules which limits a company's
ability to utilize net operating loss carryforwards and tax credit carryforwards
in periods following an ownership change. These rules define ownership change as
a greater than 50 percent point change in stock ownership within a defined
testing period, which is generally a three-year period. As a result of stock
which may be issued by us from time to time, including the stock which may be
issued relating to our outstanding convertible debentures and the conversion of
outstanding warrants, or the result of other changes in ownership of our
outstanding stock, we may experience an ownership change and consequently our
utilization of net operating loss carryforwards could be significantly limited.

        We believe that our current cash balances and anticipated cash flows
from operations will be sufficient to meet our normal operating needs for at
least the next twelve months. We do not anticipate any large capital
expenditures that will require us to seek new sources of capital. We may require
a significant amount of cash to service our indebtedness, which consists
primarily of our obligations to make monthly principal and interest payments on
the Debentures.

        Material risks to cash flow from operations include delayed or reduced
cash payments accompanying sales of new licenses or a decline in our services
business. There can be no assurance that changes in our plans or other events
affecting our operations will not result in materially accelerated or unexpected
expenditures. We cannot be assured that our cash flow from operations will be
sufficient, or that future borrowing will be available, to enable us to pay our
indebtedness. Furthermore, we cannot be assured that any or all of the holders
of our Debentures will continue to elect to convert all or a portion of their
monthly cash installments of principal into shares of our common stock in any
future periods. If we are unable to pay our indebtedness through cash flows from
operations, we may need additional financing, and we cannot be certain that we
will be able to obtain additional financing with favorable terms.

OFF-BALANCE SHEET TRANSACTIONS

        We do not maintain any off-balance sheet transactions, arrangements,
obligations or other relationships with unconsolidated entities or others that
are reasonably likely to have a material current or future effect on our
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

        The SEC has issued cautionary advice to elicit more precise disclosure
in this Item 2, MD&A, about accounting policies management believes are most
critical in portraying our financial results and in requiring management's most
difficult subjective or complex judgments.

        The preparation of financial documents in conformity with accounting
principles generally accepted in the United States of America requires
management to make judgments and estimates. On an on-going basis, we evaluate
our estimates, the most significant of which include establishing allowances for
doubtful accounts, a valuation allowance for our deferred tax assets and
determining the recoverability of our long-lived assets. The basis for our
estimates are historical experience and various assumptions that are believed to
be reasonable under the circumstances, given the available information at the
time of the estimate, the results of which form the basis for making judgments
about the carrying values of assets and liabilities that are not readily
available from other sources. Actual results may differ from the amounts
estimated and recorded in our financial statements.

        We believe the following critical accounting policies affect our more
significant judgments and estimates used in the preparation of our consolidated
financial statements:

        o       Revenue Recognition
        o       Valuation of Capitalized Software
        o       Valuation of Allowance for Doubtful Accounts Receivable

                                       16

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REVENUE RECOGNITION

        Our revenues are recognized in accordance with SOP 97-2, "Software
Revenue Recognition" ("SOP 97-2"), as amended by SOP 98-4, "Deferral of the
Effective Date of SOP 97-2, Software Revenue Recognition" and SOP 98-9,
"Modification of SOP 97-2 with Respect to Certain Transactions." Revenue from
the sale of software licenses is predominately from standardized software and is
recognized when standard software modules are delivered and accepted by the
customer, the license term has begun, the fee is fixed or determinable and
collectibility is probable. Revenue from software maintenance contracts is
recognized ratably over the life of the contract. Revenue from professional
consulting services is recognized when the service is provided.

VALUATION OF CAPITALIZED SOFTWARE

        Costs for the conceptual formulation and design of new software products
are expensed as incurred until technological feasibility has been established.
Once technological feasibility has been established, we capitalize costs to
produce the finished software products. Capitalization ceases when the product
is available for general release to customers. Costs associated with product
enhancements that extend the original product's life or significantly improve
the original product's marketability are also capitalized once technological
feasibility has been established. Amortization is calculated on a
product-by-product basis as the greater of the amount computed using (a) the
ratio that current gross revenues for a product bear to the total of current and
anticipated future gross revenues for that product or (b) the straight-line
method over the remaining economic life of the product. At each balance sheet
date, the unamortized capitalized costs of each computer software product is
compared to the net realizable value of that product. If an amount of
unamortized capitalized costs of a computer software product is found to exceed
the net realizable value of that asset, such amount will be written off. The net
realizable value is the estimated future gross revenues from that product
reduced by the estimated future costs of completing and deploying that product,
including the costs of performing maintenance and customer support required to
satisfy our responsibility set forth at the time of sale.

VALUATION OF ALLOWANCE FOR DOUBTFUL ACCOUNTS RECEIVABLE

        Management's estimate of the allowance for doubtful accounts is based on
historical information, historical loss levels, and an analysis of the
collectibility of individual accounts. We routinely assess the financial
strength of our customers and based upon factors concerning credit risk,
establish an allowance for uncollectible accounts. Management believes that
accounts receivable credit risk exposure beyond such allowance is limited.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

        The Company is exposed to the impact of interest rate changes and
changes in the market value of its investments.

        INTEREST RATE RISK. The Company's exposure to market rate risk for
changes in interest rates relates primarily to the Company's investment
portfolio. The Company has not used derivative financial instruments in its
investment portfolio. The Company invests its excess cash in a major bank money
market account. The Company protects and preserves its invested funds by
limiting default, market and reinvestment risk.

        Investments in this account carry a degree of interest rate risk. Fixed
rate securities may have their fair market value adversely impacted due to a
rise in interest rates, while floating rate securities may produce less income
than expected if interest rates fall. Due in part to these factors, the
Company's future investment income may fall short of expectations due to changes
in interest rates or the Company may suffer losses in principal if forced to
sell securities which have declined in market value due to changes in interest
rates.

ITEM 4.  CONTROLS AND PROCEDURES.

        As of the end of the period covered by this report, we carried out an
evaluation, under the supervision and with the participation of our management,
including our Chief Executive Officer and our Chief Financial Officer, of the
effectiveness of the design and operation of the Company's "disclosure controls
and procedures" (as defined in Rule 13a-15(e) under the Securities Exchange Act
of 1934, as amended). Based upon that evaluation, our Chief

                                       17
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Executive Officer and our Chief Financial Officer concluded that our disclosure
controls and procedures are effective to ensure that information required to be
disclosed by us in reports that we file or submit under the Exchange Act are
recorded, processed, summarized and reported within the time periods specified
in the Securities and Exchange Commission (the "SEC") rules and forms, and
include controls and procedures designed to ensure that information required to
be disclosed by us in such reports is accumulated and communicated to our
management, including our Chief Executive Officer and our Chief Financial
Officer, as appropriate to allow timely decisions regarding required disclosure.

        There has been no change in our internal control over financial
reporting during the quarter ended September 30, 2005 that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.

                                * * * * * * * * *

Statements in this Form 10-Q, other than statements of historical information
are forward-looking statements that are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve known and unknown risks which may cause the
Company's actual results in future periods to differ materially from expected
results. Those risks include, among others, risks associated with increased
competition, customer decisions, the successful completion of continuing
development of new products, the successful negotiation, execution and
implementation of anticipated new software contracts, the successful addition of
personnel in the marketing and technical areas and our ability to complete
development and sell and license our products at prices which result in
sufficient revenues to realize profits, and other business factors beyond our
control. Those and other risks are described in the Company's filings with the
SEC over the last 12 months, including our Form 10-K filed with the SEC on March
25, 2005, copies of which are available from the SEC or may be obtained upon
request from the Company.



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PART II:  OTHER INFORMATION

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

The partial conversion in September 2005 of an aggregate of $120,951 in
principal of our 2008 Debentures and 2009 Debentures resulted in the issuance of
a total of 403,169 shares of our common stock to the holders of such debentures.
No cash proceeds were received by us in connection with the partial conversion
of the 2008 Debentures and 2009 Debentures. The shares of our common stock
issued upon the conversion of the debentures were issued exempt from
registration in reliance on Section 3(a)(9) of the Securities Act of 1933 as an
exchange of securities by an issuer with its existing security holders where no
commission or other renumeration was paid or given directly or indirectly for
soliciting such exchange.

ITEM 6. EXHIBITS.


          EXHIBIT
            NO.                             DESCRIPTION

           31.1      Chief Executive Officer Certification Pursuant to Section
                     13a-15(e) of the Securities Exchange Act.

           31.2      Chief Financial Officer Certification Pursuant to Section
                     13a-15(e) of the Securities Exchange Act.

           32.1      Certification of John W. Roblin pursuant to 18 U.S.C.
                     Section 1350, as adopted pursuant to Section 906 of the
                     Sarbanes-Oxley Act of 2002.

           32.2      Certification of Ann F. Massey pursuant to 18 U.S.C.
                     Section 1350, as adopted pursuant to Section 906 of the
                     Sarbanes-Oxley Act of 2002.



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<PAGE>

COVER-ALL TECHNOLOGIES INC. AND SUBSIDIARY
--------------------------------------------------------------------------------

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.

                                           COVER-ALL TECHNOLOGIES INC.


Date: November 14, 2005                    By: /s/ John W. Roblin
                                               ---------------------------------
                                               John W. Roblin, Chairman of the
                                               Board of Directors, President and
                                               Chief Executive Officer


Date: November 14, 2005                    By: /s/ Ann F. Massey
                                               ---------------------------------
                                               Ann F. Massey, Chief Financial
                                               Officer





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