| ý |   | QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE                  |
|--------|--------|-------------------------------------------------------------------------------|
|   |   | SECURITIES      EXCHANGE ACT OF 1934                                          |
|   |   |                                                                          |
|   |   | For      the quarterly period ended June 30, 2008                             |
|   |   |                                                                          |
|   |   | OR                                                                            |
|   |   |                                                                          |
| o      |   | TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE                 |
|   |   | SECURITIES      EXCHANGE ACT OF 1934                                          |
|   |   |                                                                          |
|   |   | For      the transition period from ________________ to      ________________ |

| Delaware                                      |   | 13-2698053               |
|-----------------------------------------------|--------|--------------------------|
| (State      or other jurisdiction of          |   | (I.R.S.      Employer    |
| incorporation      or organization)           |   | Identification      No.) |
|                                          |   |                     |
| 55      Lane Road, Fairfield, New Jersey      |   | 07004                    |
| (Address      of principal executive offices) |   | (Zip      Code)          |

| Large      accelerated filer [  ]                                                  | Accelerated      filer [   ] |
|----------------------------------------------------------------------------------------------|---------------------------------------------|
| Non-accelerated      filer [  ] (Do not check if a smaller reporting      company) | Smaller      reporting company [X]          |

| Class                                       |   | Outstanding      at August 4, 2008 |
|---------------------------------------------|--------|------------------------------------|
| Common      Stock, $.01 par value per share |   | 24,134,683      shares             |

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| PART      I:       | FINANCIAL      INFORMATION                                                                                      |    |
|--------------------------------------------------|----------------------------------------------------------------------------------------------------------------------|---------|
|                                             |                                                                                                                 |    |
| Item      1.                           | Financial      Statements                                                                                            |    |
|                                             |                                                                                                                 |    |
|                                             | Consolidated      Balance Sheets as of June 30, 2008 (Unaudited)and      December 31, 2007 (Audited)                 | 3       |
|                                             |                                                                                                                 |    |
|                                             | Consolidated      Statements of Operations for the three and sixmonths      ended June 30, 2008 and 2007 (Unaudited) |  5 |
|                                             |                                                                                                                 |    |
|                                             | Consolidated      Statements of Cash Flows for the sixmonths      ended June 30, 2008 and 2007 (Unaudited)           |  6 |
|                                             |                                                                                                                 |    |
|                                             | Notes to      Consolidated Financial Statements (Unaudited)                                                          |  7 |
|                                             |                                                                                                                 |    |
| Item 2.                                          | Management’s      Discussion and Analysis of FinancialCondition      and Results of Operations                 | 12      |
|                                             |                                                                                                                 |    |
| Item 3.                                          | Qualitative      and Quantitative Disclosures About      Market Risk                                                 | 19      |
|                                             |                                                                                                                 |    |
| Item      4.                                | Controls      and Procedures                                                                                    | 19      |
|                                             |                                                                                                                 |    |
| PART      II:                               | OTHER      INFORMATION                                                                                          |    |
|                                             |                                                                                                                 |    |
| Item      1A.                               | Risk      Factors                                                                                          | 20      |
|                                             |                                                                                                                 |    |
| Item      2.                                | Unregistered      Sales of Equity Securities and Use of Proceeds                                                | 20      |
|                                             |                                                                                                                 |    |
| Item      4.                                | Submission      of Matters to a Vote of Security Holders                                                        | 20      |
|                                             |                                                                                                                 |    |
| Item      6.                                | Exhibits                                                                                                        | 20      |
|                                             |                                                                                                                 |    |
| SIGNATURES                                  |                                                                                                                 | 22      |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | June      30, 2008  |      |   | December      31, 2007  |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|-----------|--------|------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | (Unaudited)              |      |   | (Audited)                    |   |
| Assets:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                     |      |   |                         |   |
| Current      Assets:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                     |      |   |                         |   |
| Cash      and Cash Equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | $                        | 1,769,905 |   |                         | $      | 10,914 |   |
| Accounts      Receivable (Less Allowance for Doubtful Accountsof      $25,000 in 2008 and 2007)                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                     | 1,815,501 |   |                         |   | 3,672,421 |   |
| Prepaid      Expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                     | 346,325   |   |                         |   | 293,396 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                     |      |   |                         |   |   |   |
| Total      Current Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                     | 3,931,731 |   |                         |   | 3,976,731 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                     |      |   |                         |   |   |   |
| Property      and Equipment – At Cost:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                     |      |   |                         |   |   |   |
| Furniture,      Fixtures and Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                     | 608,857   |   |                         |   | 466,622 |   |
| Less:  Accumulated      Depreciation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                     | (259,832  | )      |                         |   | (297,074 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                     |      |   |                         |   |   |   |
| Property      and Equipment – Net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                     | 349,025   |   |                         |   | 169,548 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                     |      |   |                         |   |   |   |
| Capitalized      Software (Less Accumulated Amortization of$10,626,670      and $10,180,752, respectively)                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                     | 1,669,028 |   |                         |   | 1,580,971 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                     |      |   |                         |   |   |   |
| Deferred      Financing Costs (Net of Accumulated Amortization of$241,311      and $215,038, respectively)                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                     | —   |   |                         |   | 26,273 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                     |      |   |                         |   |   |   |
| Other      Assets                                                                                    |   |                     | 110,151   |   |                         |   | 110,151 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                     |      |   |                         |   |   |   |
| Total      Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | $                        | 6,059,935 |   |                         | $      | 5,863,674 |   |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | June      30,2008 |        |   | December      31,2007 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|-------------|--------|-----------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | (Unaudited)       |        |   | (Audited)             |   |
| Liabilities and Stockholders’      Equity:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |              |        |   |                  |   |
| Current      Liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |              |        |   |                  |   |
|    Accounts      Payable                                                                                                                    |   | $                 | 130,593     |   |                  | $      | 579,446 |   |
|    Accrued      Liabilities                                                                                                                 |   |              | 536,291     |   |                  |   | 1,080,136 |   |
|    Deferred      Charges                                                                                                                    |   |              | 22,503      |   |                  |   | 22,503 |   |
|    Convertible      Debentures                                                                                                              |   |              | —     |   |                  |   | 196,699 |   |
|    Convertible      Debenture – Related      Party                                                                                    |   |              | —     |   |                  |   | 65,566 |   |
|    Unearned      Revenue                                                                                                                    |   |              | 1,434,514   |   |                  |   | 1,487,545 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |              |        |   |                  |   |   |   |
|    Total      Current      Liabilities                                                                                                      |   |              | 2,123,901   |   |                  |   | 3,431,895 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |              |        |   |                  |   |   |   |
| Long-Term      Liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |              |        |   |                  |   |   |   |
|    Deferred      Charges                                                                                                                    |   |              | 135,096     |   |                  |   | 146,347 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |              |        |   |                  |   |   |   |
|    Total      Long-Term      Liabilities                                                                                                    |   |              | 135,096     |   |                  |   | 146,347 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |              |        |   |                  |   |   |   |
|    Total      Liabilities                                                                                                                   |   |              | 2,258,997   |   |                  |   | 3,578,242 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |              |        |   |                  |   |   |   |
| Commitments      and      Contingencies                                                                                                                    |   |              | —     |   |                  |   | — |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |              |        |   |                  |   |   |   |
| Stockholders’      Equity:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |              |        |   |                  |   |   |   |
| Common      Stock, $.01 Par Value, Authorized 75,000,000 Shares;24,336,553      Shares and 23,192,302 Shares Issued and Outstanding                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |              | 243,365     |   |                  |   | 231,923 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |              |        |   |                  |   |   |   |
| Capital      In Excess Of Par      Value                                                                                                                   |   |              | 28,705,530  |   |                  |   | 28,073,659 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |              |        |   |                  |   |   |   |
| Accumulated      Deficit                                                                                                                                   |   |              | (25,147,957 | )      |                  |   | (26,020,150 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |              |        |   |                  |   |   |   |
| Total      Stockholders’      Equity                                                                                                                 |   |              | 3,800,938   |   |                  |   | 2,285,432 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |              |        |   |                  |   |   |   |
| Total      Liabilities and Stockholders’      Equity                                                                                                 |   | $                 | 6,059,935   |   |                  | $      | 5,863,674 |   |

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|                                                                                                                |   | Three      months ended June 30, |       |   | Six      months ended June 30, |   |
|---------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|------------|--------|--------------------------------|--------|
|                                                                                                                |   | 2008                             |       |   | 2007                           |   |   | 2008 |   |   | 2007 |   |
| Revenues:                                                                                                           |   |                             |       |   |                           |   |   |   |   |   |   |   |
| Licenses                                                                                                            |   | $                                | 170,899    |   |                           | $      | 291,371 |   |   | $ | 869,399 |   |   | $ | 494,836 |   |
| Maintenance                                                                                                         |   |                             | 958,672    |   |                           |   | 818,216 |   |   |   | 1,947,515 |   |   |   | 1,644,290 |   |
| Professional      Services                                                                                          |   |                             | 828,886    |   |                           |   | 444,658 |   |   |   | 1,684,316 |   |   |   | 961,966 |   |
| Applications      Service Provider (“ASP”) Services                                                     |   |                             | 551,959    |   |                           |   | 384,618 |   |   |   | 1,005,594 |   |   |   | 769,236 |   |
| Total      Revenues                                                                                                 |   |                             | 2,510,416  |   |                           |   | 1,938,863 |   |   |   | 5,506,824 |   |   |   | 3,870,328 |   |
| Cost      of Revenues:                                                                                              |   |                             |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Licenses                                                                                                            |   |                             | 258,386    |   |                           |   | 319,784 |   |   |   | 536,881 |   |   |   | 534,998 |   |
| Maintenance                                                                                                         |   |                             | 620,302    |   |                           |   | 628,120 |   |   |   | 1,074,887 |   |   |   | 1,354,607 |   |
| Professional      Services                                                                                          |   |                             | 359,581    |   |                           |   | 298,292 |   |   |   | 741,323 |   |   |   | 538,209 |   |
| ASP      Services                                                                                                   |   |                             | 244,791    |   |                           |   | 115,490 |   |   |   | 552,967 |   |   |   | 210,082 |   |
| Total      Cost of Revenues                                                                                         |   |                             | 1,483,060  |   |                           |   | 1,361,686 |   |   |   | 2,906,058 |   |   |   | 2,637,896 |   |
| Direct      Margin                                                                                                  |   |                             | 1,027,356  |   |                           |   | 577,177 |   |   |   | 2,600,766 |   |   |   | 1,232,432 |   |
| Operating      Expenses:                                                                                            |   |                             |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Sales      and Marketing                                                                                            |   |                             | 156,998    |   |                           |   | 180,829 |   |   |   | 391,325 |   |   |   | 291,025 |   |
| General      and Administrative                                                                                     |   |                             | 417,161    |   |                           |   | 294,381 |   |   |   | 973,010 |   |   |   | 572,084 |   |
| Research      and Development                                                                                       |   |                             | 166,583    |   |                           |   | 93,666 |   |   |   | 382,211 |   |   |   | 184,379 |   |
| Total      Operating Expenses                                                                                       |   |                             | 740,742    |   |                           |   | 568,876 |   |   |   | 1,746,546 |   |   |   | 1,047,488 |   |
| Operating      Income                                                                                               |   |                             | 286,614    |   |                           |   | 8,301 |   |   |   | 854,220 |   |   |   | 184,944 |   |
| Other      Income (Expense):                                                                                        |   |                             |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Interest      Expense                                                                                               |   |                             | (4,531     | )      |                           |   | (4,310 | ) |   |   | (9,063 | ) |   |   | (39,951 | ) |
| Interest      Expense – Related Party                                                                         |   |                             | (1,308     | )      |                           |   | (1,475 | ) |   |   | (2,616 | ) |   |   | (2,934 | ) |
| Interest      Income                                                                                                |   |                             | 3,041      |   |                           |   | 2 |   |   |   | 3,043 |   |   |   | 4 |   |
| Other      Income                                                                                                   |   |                             | 8,419      |   |                           |   | — |   |   |   | 26,609 |   |   |   | — |   |
| Total      Other Income (Expense)                                                                                   |   |                             | 5,621      |   |                           |   | (5,783 | ) |   |   | 17,973 |   |   |   | (42,881 | ) |
| Income      Before Income Taxes                                                                                     |   |                             | 292,235    |   |                           |   | 2,518 |   |   |   | 872,193 |   |   |   | 142,063 |   |
| Income      Taxes                                                                                                   |   |                             | —    |   |                           |   | — |   |   |   | — |   |   |   | — |   |
| Net      Income                                                                                                     |   | $                                | 292,235    |   |                           | $      | 2,518 |   |   | $ | 872,193 |   |   | $ | 142,063 |   |
| Basic      Earnings Per Common Share                                                                                |   | $                                | 0.01       |   |                           | $      | 0.00 |   |   | $ | 0.04 |   |   | $ | 0.01 |   |
| Diluted      Earnings Per Common Share                                                                              |   | $                                | 0.01       |   |                           | $      | 0.00 |   |   | $ | 0.04 |   |   | $ | 0.01 |   |
| Weighted Average Number of      CommonShares Outstanding for Basic      Earnings Per Common      Share              |   |                             | 23,520,000 |   |                           |   | 23,014,000 |   |   |   | 23,441,000 |   |   |   | 20,458,000 |   |
| Weighted Average Number of      CommonShares Outstanding for Diluted      Earnings  Per Common      Share |   |                             | 24,085,000 |   |                           |   | 24,636,000 |   |   |   | 24,043,000 |   |   |   | 22,005,000 |   |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | Six      months ended June 30, |      |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|-----------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | 2008                           |      |   | 2007 |   |
| Cash      Flows from Operating Activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                           |      |   |   |   |
| Net      Income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | $                              | 872,193   |   |   | $ | 142,063 |   |
| Adjustments      to Reconcile Net Income (Loss) to                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                           |      |   |   |   |   |   |
| Net      Cash Provided From (Used For) Operating Activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                           |      |   |   |   |   |   |
| Depreciation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                           | 30,374    |   |   |   | 24,687 |   |
| Amortization      of Capitalized Software                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                           | 445,918   |   |   |   | 451,549 |   |
| Amortization      of Deferred Financing Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                           | 26,273    |   |   |   | 17,236 |   |
| Amortization      of Stock-based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                           | 354,248   |   |   |   | — |   |
| Changes      in Assets and Liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                           |      |   |   |   |   |   |
| (Increase)      Decrease in:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                           |      |   |   |   |   |   |
| Accounts      Receivable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                           | 1,856,920 |   |   |   | 369,894 |   |
| Prepaid      Expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                           | (52,929   | ) |   |   | 61,123 |   |
| Other      Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                           | —   |   |   |   | (500 | ) |
| Increase      (Decrease) in:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                           |      |   |   |   |   |   |
| Accounts      Payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                           | (448,853  | ) |   |   | 119,208 |   |
| Accrued      Liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                           | (543,845  | ) |   |   | (288,562 | ) |
| Deferred      Charges                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                           | (11,251   | ) |   |   | 2,990 |   |
| Unearned      Revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                           | (53,031   | ) |   |   | (47,482 | ) |
| Net      Cash Provided From Operating Activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                           | 2,476,017 |   |   |   | 852,206 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                           |      |   |   |   |   |   |
| Cash      Flows from Investing Activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                           |      |   |   |   |   |   |
| Capital      Expenditures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                           | (209,851  | ) |   |   | (16,826 | ) |
| Capitalized      Software Expenditures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                           | (533,975  | ) |   |   | (566,008 | ) |
| Net      Cash Provided From (Used For) Investing Activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                           | (743,826  | ) |   |   | (582,834 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                           |      |   |   |   |   |   |
| Cash      Flows from Financing Activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                           |      |   |   |   |   |   |
| Proceeds      from Exercise of Stock Options and Warrants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                           | 26,800    |   |   |   | 43,135 |   |
| Net      Cash Provided From Financing Activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                           | 26,800    |   |   |   | 43,135 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                           |      |   |   |   |   |   |
| Change      in Cash and Cash      Equivalents                                                                                                            |   |                           | 1,758,991 |   |   |   | 312,507 |   |
| Cash      and Cash Equivalents – Beginning of      Period                                                                                          |   |                           | 10,914    |   |   |   | 131,847 |   |
| Cash      and Cash Equivalents – End of      Period                                                                                                |   | $                              | 1,769,905 |   |   | $ | 444,354 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                           |      |   |   |   |   |   |
| Supplemental      Disclosures of Cash Flow Information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                           |      |   |   |   |   |   |
| Cash      Paid During the Periods for:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                           |      |   |   |   |   |   |
| Interest                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | $                              | 9,063     |   |   | $ | 39,951 |   |
| Interest – Related      Party                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                           | 2,616     |   |   |   | 2,934 |   |
| Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                           | —   |   |   |   | — |   |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | For      the three months endedJune      30, 2008 |    |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | Income(Numerator)                                 |    |   | Shares(Denominator) |   |   | Per      ShareAmount |   |
| Basic      EPS:                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                              |    |   |   |   |   |   |   |
| Income      (Loss) Available to CommonStockholders                                                                                                    |   | $                                                 | 292,235 |   |   |   | 23,519,647 |   |   | $ | 0.01 |   |
| Interest      Reversal Convertible Debentures(Net      of      Tax)                                                                                   |   |                                              | — |   |   |   | — |   |   |   | — |   |
| Effect      of Dilutive Securities:                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                              |    |   |   |   |   |   |   |   |   |   |
| Exercise      of      Options                                                                                                                         |   |                                              | — |   |   |   | 485,643 |   |   |   | — |   |
| Exercise      of      Warrants                                                                                                                        |   |                                              | — |   |   |   | 79,350 |   |   |   | — |   |
| Conversion      of Convertible Debentures                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                              | — |   |   |   | — |   |   |   | — |   |
| Diluted      EPS:                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                              |    |   |   |   |   |   |   |   |   |   |
| Income      (Loss) Available to Common StockholdersPlus      Assumed      Conversions                                                                 |   | $                                                 | 292,235 |   |   |   | 24,084,640 |   |   | $ | 0.01 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | For      the six months endedJune      30, 2008 |    |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | Income(Numerator)                               |    |   | Shares(Denominator) |   |   | Per      ShareAmount |   |
| Basic      EPS:                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                            |    |   |   |   |   |   |   |
| Income      (Loss) Available to CommonStockholders                                                                                                    |   | $                                               | 872,193 |   |   |   | 23,440,703 |   |   | $ | 0.04 |   |
| Interest      Reversal Convertible Debentures(Net      of      Tax)                                                                                   |   |                                            | — |   |   |   | — |   |   |   | — |   |
| Effect      of Dilutive Securities:                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                            |    |   |   |   |   |   |   |   |   |   |
| Exercise      of      Options                                                                                                                         |   |                                            | — |   |   |   | 521,462 |   |   |   | — |   |
| Exercise      of      Warrants                                                                                                                        |   |                                            | — |   |   |   | 81,335 |   |   |   | — |   |
| Conversion      of Convertible Debentures                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                            | — |   |   |   | — |   |   |   | — |   |
| Diluted      EPS:                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                            |    |   |   |   |   |   |   |   |   |   |
| Income      (Loss) Available to Common StockholdersPlus      Assumed      Conversions                                                                 |   | $                                               | 872,193 |   |   |   | 24,043,500 |   |   | $ | 0.04 |   |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | For      the three months endedJune 30,      2007 |    |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | Income(Numerator)                                      |    |   | Shares(Denominator) |   |   | Per      ShareAmount |   |
| Basic      EPS:                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                   |    |   |   |   |   |   |   |
| Income      (Loss) Available to CommonStockholders                                                                                  |   | $                                                      | 2,518   |   |   |   | 23,013,520 |   |   | $ | 0.00 |   |
| Interest      Reversal Convertible Debentures(Net      of      Tax)                                                                 |   |                                                   | 3,147   |   |   |   | — |   |   |   | — |   |
| Effect      of Dilutive Securities:                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                                   |    |   |   |   |   |   |   |   |   |   |
| Exercise      of      Options                                                                                                       |   |                                                   | — |   |   |   | 660,596 |   |   |   | — |   |
| Exercise      of      Warrants                                                                                                      |   |                                                   | — |   |   |   | 87,287 |   |   |   | — |   |
| Conversion      of Convertible Debentures                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                                   | — |   |   |   | 874,217 |   |   |   | — |   |
| Diluted      EPS:                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                                   |    |   |   |   |   |   |   |   |   |   |
| Income      (Loss) Available to Common StockholdersPlus      Assumed      Conversions                                                                                                                                                   |   | $                                                      | 5,665   |   |   |   | 24,635,620 |   |   | $ | 0.00 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | For      the six months endedJune      30, 2007 |    |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | Income(Numerator)                               |    |   | Shares(Denominator) |   |   | Per      ShareAmount |   |
| Basic      EPS:                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                            |    |   |   |   |   |   |   |
| Income      (Loss) Available to CommonStockholders                                                                                                    |   | $                                               | 142,063 |   |   |   | 20,457,699 |   |   | $ | 0.01 |   |
| Interest      Reversal Convertible Debentures(Net      of      Tax)                                                                                   |   |                                            | 6,698   |   |   |   | — |   |   |   | — |   |
| Effect      of Dilutive Securities:                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                                            |    |   |   |   |   |   |   |   |   |   |
| Exercise      of      Options                                                                                                                         |   |                                            | — |   |   |   | 589,100 |   |   |   | — |   |
| Exercise      of      Warrants                                                                                                                        |   |                                            | — |   |   |   | 83,572 |   |   |   | — |   |
| Conversion      of Convertible Debentures                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                            | — |   |   |   | 874,216 |   |   |   | — |   |
| Diluted      EPS:                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                            |    |   |   |   |   |   |   |   |   |   |
| Income      (Loss) Available to Common StockholdersPlus      Assumed      Conversions                                                                 |   | $                                               | 148,761 |   |   |   | 22,004,587 |   |   | $ | 0.01 |   |

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|                                                                                                                                                                                                                                                                                         |   | Shares |      |   | Exercise      PricePer      Share |   | Weighted-Average      Remaining      Contractual      Life |   | Weighted-Average      Exercise Price |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|-----------------------------------|--------|------------------------------------------------------------|--------|--------------------------------------|--------|
| Balance,      December 31, 2007                                                                                                                                                                                                                                                              |   |   | 2,533,000 |   |                              | $      | 0.34      - 2.00                                           |   | 2.1      years                       |   | $ | 0.97 |   |
| Granted                                                                                                                                                                                                                                                                                      |   |   | —   |   |                              |   | —                                                    |   |                                 |   |   | — |   |
| Exercised                                                                                                                                                                                                                                                                                    |   |   | (150,000  | )      |                              | $      | 0.34      - 0.60                                           |   |                                 |   | $ | 0.48 |   |
| Canceled                                                                                                                                                                                                                                                                                     |   |   | —   |   |                              |   | —                                                    |   |                                 |   |   | — |   |
| Expired                                                                                                                                                                                                                                                                                      |   |   | (758,000  | )      |                              | $      | 1.13      - 2.00                                           |   |                                 |   | $ | 0.51 |   |
| Balance,      June 30,      2008                                           |   |   | 1,625,000 |   |                              | $      | 0.34      - 1.40                                           |   | 2.7      years                       |   | $ | 0.80 |   |

| ●      | Level      1-Inputs are unadjusted quoted prices in active markets for identical      assets or liabilities available at the measurement  date. |
|---------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|

| ●      | Level      2-Inputs are unadjusted quoted prices for similar assets and liabilities      in active markets, quoted prices for identical or similar assets and      liabilities in markets that are not active, inputs other than quoted      prices that are observable and inputs derived from or corroborated by      observable market data. |
|---------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●      | Level      3-Inputs are unobservable inputs which reflect the reporting entity’s own      assumptions on what assumptions the market participants would use in      pricing the assets or liabilities based on the best available      information. |
|---------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                                             |   | Three      MonthsEnded      June 30, |   | Six      MonthsEnded      June 30, |
|----------------------------------------------------------------------------------|--------|-------------------------------------------|--------|-----------------------------------------|
|                                                                             |   | 2008                                      |   | 2007                                    |   | 2008 |   | 2007 |
| Revenues:                                                                        |   |                                      |   |                                    |   |   |   |   |   |   |   |   |
| License                                                                          |   |                                      | 6.8    | %                                       |   |   | 15.0 | % |   |   | 15.8 | % |   |   | 12.8 | % |
| Maintenance                                                                      |   |                                      | 38.2   |                                    |   |   | 42.2 |   |   |   | 35.4 |   |   |   | 42.5 |   |
| Professional    Services                                                         |   |                                      | 33.0   |                                    |   |   | 22.9 |   |   |   | 30.6 |   |   |   | 24.8 |   |
| Applications Service Provider      (“ASP”)   Services |   |                                      | 22.0   |                                    |   |   | 19.9 |   |   |   | 18.2 |   |   |   | 19.9 |   |
| Total Revenues                                                                   |   |                                      | 100.0  |                                    |   |   | 100.0 |   |   |   | 100.0 |   |   |   | 100.0 |   |
|                                                                             |   |                                      |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost      of Revenues:                                                           |   |                                      |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| License                                                                          |   |                                      | 10.3   |                                    |   |   | 16.5 |   |   |   | 9.7 |   |   |   | 13.8 |   |
| Maintenance                                                                      |   |                                      | 24.7   |                                    |   |   | 32.4 |   |   |   | 19.5 |   |   |   | 35.0 |   |
| Professional    Services                                                         |   |                                      | 14.3   |                                    |   |   | 15.4 |   |   |   | 13.6 |   |   |   | 13.9 |   |
| ASP Services                                                                     |   |                                      | 9.8    |                                    |   |   | 6.0 |   |   |   | 10.0 |   |   |   | 5.4 |   |
| Total Cost of      Revenues                                                      |   |                                      | 59.1   |                                    |   |   | 70.2 |   |   |   | 52.8 |   |   |   | 68.2 |   |
| Direct Margin                                                                    |   |                                      | 40.9   |                                    |   |   | 29.8 |   |   |   | 47.2 |   |   |   | 31.8 |   |
|                                                                             |   |                                      |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      Expenses:                                                         |   |                                      |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Sales and    Marketing                                                           |   |                                      | 6.3    |                                    |   |   | 9.3 |   |   |   | 7.1 |   |   |   | 7.5 |   |
| General and      Administrative                                                  |   |                                      | 16.6   |                                    |   |   | 15.2 |   |   |   | 17.7 |   |   |   | 14.8 |   |
| Research and      Development                                                    |   |                                      | 6.6    |                                    |   |   | 4.9 |   |   |   | 6.9 |   |   |   | 4.7 |   |
| Total Operating      Expenses                                                    |   |                                      | 29.5   |                                    |   |   | 29.4 |   |   |   | 31.7 |   |   |   | 27.0 |   |
| Operating Income                                                                 |   |                                      | 11.4   |                                    |   |   | 0.4 |   |   |   | 15.5 |   |   |   | 4.8 |   |

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| Other      (Expense) Income:      |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |
|-----------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|
| Interest Expense                  |   |   | (0.1    | )      |   |   | (0.3    | )      |   |   | (0.2    | )      |   |   | (1.1    | )      |
| Other Income                      |   |   | 0.3     |   |   |   | — |   |   |   | 0.5     |   |   |   | — |   |
| Total Other (Expense)      Income |   |   | 0.2     |   |   |   | (0.3    | )      |   |   | 0.3     |   |   |   | (1.1    | )      |
| Income Before Income      Taxes   |   |   | 11.6    |   |   |   | 0.1     |   |   |   | 15.8    |   |   |   | 3.7     |   |
|                              |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |
| Income      Taxes (Benefit)       |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
|                              |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |
| Net      Income                   |   |   | 11.6    | %      |   |   | 0.1     | %      |   |   | 15.8    | %      |   |   | 3.7     | %      |

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| ●       | Our      ability to generate cash is subject to general economic, financial,      competitive and other factors beyond its  control. |
|---------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------|

| ●       | Our      need to invest resources in product development in order to continue to      enhance our current product, develop new products, attract and retain      customers and keep pace with competitive product introductions and      technological developments. |
|---------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●       | We      experience intense competition in our industry and continuing      technological changes. |
|---------------------------------------------|---------------------------------------------------------------------------------------------------|

| ●       | Insurance      companies typically are slow in making decisions and have numerous      bureaucratic and institutional obstacles, which can make our efforts to      attain new customers difficult. |
|---------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●       | We      compete with a number of larger companies who have greater resources than      those of ours.  We compete on the basis of insurance knowledge,      products, services, price, technological advances and system functionality      and performance. |
|---------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ●       | Our      operations continue to depend upon the continuing business of our existing      customers and our ability to attract new  customers. |
|---------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|

| ●       | A      decline in software spending in the insurance industry could result in a      decrease in our revenue. |
|---------------------------------------------|---------------------------------------------------------------------------------------------------------------|

| ●      | Revenue      Recognition |
|---------------------------------------|--------------------------|

| ●      | Valuation      of Capitalized Software |
|---------------------------------------|----------------------------------------|

| ●      | Valuation      of Allowance for Doubtful AccountsReceivable |
|---------------------------------------|-------------------------------------------------------------|

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| Director              | Votes For  | Votes Withheld |
|-----------------------|------------|----------------|
|                  |       |           |
| Earl      Gallegos    | 12,973,874 | 11,989         |
| Mark      D. Johnston | 12,972,474 | 13,389         |

| Votes For  | Votes Against | Votes Withheld |
|------------|---------------|----------------|
| 12,985,262 | 351           | 250            |

| Exhibit |   |                                                                                                                                                                                                                                                                                        |
|---------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| No.     |   | Description                                                                                                                                                                                                                                                                                 |
|    |   |                                                                                                                                                                                                                                                                                        |
| 3(a)    |   | Certificate      of Incorporation of the Registrant filed on April 22, 1985 [incorporated      by reference to Exhibit 3(a) to the Registrant’s Annual Report on Form      10-K (Commission File No. 0-13124) filed on January 29,    1986].                                          |
|    |   |                                                                                                                                                                                                                                                                                        |
| 3(b)    |   | Certificate      of Amendment of Certificate of Incorporation of the Registrant filed on      May 6, 1987 [incorporated by reference to Exhibit 3.2 to the      Registrant’s Registration Statement on Form S-1 (Commission File No.      33-17533) filed on September 29,1987]. |

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| 3(c)   |   | Certificate      of Amendment of Certificate of Incorporation of the Registrant filed on      March 26, 1990 [incorporated by reference to Exhibit 3(d) to the      Registrant’s Quarterly Report on Form 10-Q (Commission File No. 0-13124)      filed on June 14, 1990].                        |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                    |
| 3(d)   |   | Certificate      of Amendment of Certificate of Incorporation of the Registrant filed on      March 18, 1992 [incorporated by reference to Exhibit 1 to the Registrant’s      Current Report on Form 8-K (Commission File No. 0-13124) filed on March      30, 1992].                             |
|   |   |                                                                                                                                                                                                                                                                                                    |
| 3(e)   |   | Certificate      of Amendment of Certificate of Incorporation of the Registrant filed on      June 21, 1996 [incorporated by reference to Exhibit 3(e) to the      Registrant’s Amendment No. 1 to Registration Statement on Form S-3      (Commission File No. 0-13124) filed on July 10, 1996]. |
|   |   |                                                                                                                                                                                                                                                                                                    |
| 3(f)   |   | Certificate      of Amendment of Certificate of Incorporation of the Registrant filed on      July 12, 2000 [incorporated by reference to Exhibit 3(g) to the      Registrant’s Quarterly Report on Form 10-Q (Commission File No. 0-13124)      filed on August 11, 2000].                       |
|   |   |                                                                                                                                                                                                                                                                                                    |
| 3(g)   |   | Bylaws      of the Registrant, as amended [incorporated by reference to Exhibit 3(g)      to the Registrant’s Amendment No. 1 to Registration Statement on Form S-3      (Commission file No. 0-13124) filed on July 10, 1996].                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                    |
| 4      |   | Form      of Common Stock Certificate of the Registrant [incorporated by reference      to Exhibit 4(a) to the Registrant’s Annual Report on Form 10-K (Commission      File No. 0-13124) filed on January 29, 1986].                                                                             |
|   |   |                                                                                                                                                                                                                                                                                                    |
| 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.                                                                                                                                       |

Filedherewith.

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|                                  | COVER-ALL TECHNOLOGIES      INC. |                                                     |
|---------------------------------------|----------------------------------|----------------------------------------------------------|
|                                  |                             |                                                     |   |
| Date:  August      11, 2008 | By:                              | /s/ John      W. Roblin                             |   |
|                                  |                             | John      W. Roblin, Chairman of the Board of Directors, |   |
|                                  |                             | President      and Chief Executive Officer               |   |
|                                  |                             |                                                     |   |
|                                  |                             |                                                     |   |

| Date:  August      11, 2008 | By:    | /s/ Ann      F. Massey                 |   |
|---------------------------------------|--------|---------------------------------------------|--------|
|                                  |   | Ann      F. Massey, Chief Financial Officer |   |
|                                  |   |                                        |   |
|                                  |   |                                        |   |