UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                              Washington D.C. 20549
                                    ---------

                                    FORM 10-Q

                Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 1998   Commission File Number  0-13124

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

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

            18-01 Pollitt Drive
            Fair Lawn, New Jersey                              07410
  (Address of principal executive offices)                  (Zip code)

Registrant's telephone number, including area code:(201) 794-4800


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the  Securities  and  Exchange Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.

                              Yes   X      No


                  Number of shares outstanding at May 13, 1998:

          16,978,022 shares of Common Stock, par value $.01 per share.


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COVER-ALL TECHNOLOGIES INC. AND SUBSIDIARIES
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INDEX TO FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1998.
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PART I:  FINANCIAL INFORMATION

Item 1.  Financial Statements

   Consolidated Balance Sheets as of March 31, 1998 [Unaudited]
   and December 31, 1997 [Audited].................................. 1

   Consolidated Statements of Operations for the three months ended
   March 31, 1998 and 1997 [Unaudited].............................. 3

   Consolidated Statements of Cash Flows for the three months ended
   March 31, 1998 and 1997 [Unaudited].............................. 4

   Notes to Consolidated Financial Statements [Unaudited]........... 5

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations........................ 8

PART II: OTHER INFORMATION..........................................10

SIGNATURES..........................................................11





                      .   .   .   .   .   .   .   .   .   .


<PAGE>



PART I:  FINANCIAL INFORMATION

Item 1:  Financial Statements

COVER-ALL TECHNOLOGIES INC. AND SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
------------------------------------------------------------------------------


<TABLE>

                                                            March 31,   December 31,
                                                            1 9 9 8        1 9 9 7
                                                           [Unaudited]    [Audited]
Assets:
Current Assets:
<S>                                                        <C>          <C>        
  Cash and Cash Equivalents                                $2,763,060   $ 2,908,167
  Notes and Accounts Receivable [Less Allowance for 
   Doubtful Accounts of $185,610 and $185,610]              4,009,813     1,234,706
  Prepaid Expenses                                            235,864       140,783
                                                           ----------   -----------

  Total Current Assets                                      7,008,737     4,283,656
                                                           ----------   -----------

Property and Equipment - At Cost:
  Furniture, Fixtures and Equipment                         2,650,900     2,625,678
  Less: Accumulated Depreciation                           (2,436,162)   (2,397,704)
                                                           ----------   -----------

  Property and Equipment - Net                                214,738       227,974
                                                           ----------   -----------

Software License Held for Sale at December 31, 1997
  [Less Accumulated Amortization of $-0- and $1,750,000]           --     3,250,000
                                                           ----------   -----------

Capitalized Software [Less Accumulated Amortization of 
 $1,992,489 and $1,820,857]                                   541,424       663,057

Notes Receivable - Long-Term                                2,893,054            --
                                                           ----------   -----------

Other Assets                                                   65,735        59,335
                                                           ----------   -----------

  Total Assets                                             $10,723,688  $ 8,484,022
                                                           ===========  ===========


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

</TABLE>

                                         1

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COVER-ALL TECHNOLOGIES INC. AND SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
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                                                       March 31,   December 31,
                                                       1 9 9 8        1 9 9 7
                                                      [Unaudited]    [Audited]
Liabilities and Stockholders' Equity:
Current Liabilities:
  Accounts Payable                                    $  665,923   $   571,309
  Accrued Liabilities                                  1,772,276     1,618,676
  Unearned Revenue                                       809,116       447,133
                                                      ----------   -----------

  Total Current Liabilities                            3,247,315     2,637,118

Convertible Debentures                                 3,000,000     3,000,000
                                                      ----------   -----------

  Total Liabilities                                    6,247,315     5,637,118
                                                      ----------   -----------

Commitments and Contingencies                                 --            --
                                                      ----------   -----------

Stockholders' Equity:
  Common Stock, $.01 Par Value, Authorized 
   30,000,000 Shares, Issued 16,863,222 and 
   16,791,122 Shares, Respectively                       168,632       167,911

  Capital in Excess of Par Value                      26,539,289    25,273,031

  Accumulated Deficit                                (22,231,548)  (22,594,038)
                                                      -----------  -----------

  Total Stockholders' Equity                           4,476,373     2,846,904
                                                      ----------   -----------

  Total Liabilities and Stockholders' Equity         $10,723,688  $ 8,484,022
                                                      ===========  ===========




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



                                         2

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COVER-ALL TECHNOLOGIES INC. AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF OPERATIONS
[UNAUDITED]
------------------------------------------------------------------------------


                                                          Three months ended
                                                               March 31,
                                                          1 9 9 8     1 9 9 7
                                                          -------     -------

Revenues:
  Licenses                                             $ 1,409,035 $    73,976
  Maintenance                                              895,133     586,860
  Professional Services                                    566,788     221,878
                                                       ----------- -----------

  Total Revenues                                         2,870,956     882,714
                                                       ----------- -----------

Cost of Revenues:
  Licenses                                                 896,682     453,723
  Maintenance                                              341,325     639,500
  Professional Services                                    175,893     213,167
                                                       ----------- -----------

  Total Cost of Revenues                                 1,413,900   1,306,390
                                                       ----------- -----------

  Gross Profit                                           1,457,056    (423,676)
                                                       ----------- -----------

Operating Expenses:
  Sales and Marketing                                      336,183     351,929
  General and Administrative                               417,029     806,298
  Research and Development                                 264,278          --
                                                       ----------- -----------

  Total Operating Expenses                               1,017,490   1,158,227
                                                       ----------- -----------

  Operating Income [Loss]                                  439,566  (1,581,903)

Interest Income                                             16,675       1,718

Interest Expense                                            93,750       5,729
                                                        ---------- -----------

  Net Income [Loss]                                    $   362,491 $(1,585,914)
                                                       =========== ===========

  Basic Earnings [Loss] Per Share                      $      0.02 $     (0.09)
                                                       =========== ===========

  Diluted Earnings [Loss] Per Share                    $      0.02 $     (0.09)
                                                       =========== ===========

  Weighted Average Number of Common Shares Outstanding  16,814,053  16,717,994




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

                                         3

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COVER-ALL TECHNOLOGIES INC. AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF CASH FLOWS
[UNAUDITED]
------------------------------------------------------------------------------

<TABLE>

                                                               Three months ended
                                                                    March 31,
                                                               1 9 9 8     1 9 9 7
                                                               -------     -------
Cash Flows from Operating Activities:
<S>                                                        <C>          <C>         
  Net Income [Loss]                                        $  362,491   $(1,585,914)
  Adjustments to Reconcile Net Income [Loss] to Net Cash
   Used for Operating Activities:
   Depreciation                                                38,458        58,519
   Amortization of Capitalized Software and Software License  171,632       453,724
   Provision for Uncollectible Accounts                            --        33,099
   Noncash Compensation Expense on Granting of Stock Options       --        12,157

  Changes in Assets and Liabilities:
   [Increase] Decrease in:
     Notes and Accounts Receivable                         (1,775,107)      519,666
     Prepaid Expenses                                         (95,081)     (364,638)
     Other Assets                                              (6,400)        2,333

   Increase [Decrease] in:
     Accounts Payable                                          94,614       243,295
     Accrued Liabilities                                      153,600      (208,142)
     Unearned Revenue                                         361,983      (148,442)
                                                           ----------   -----------

  Net Cash [Used For] Continuing Operating Activities        (693,810)     (984,343)
                                                           ----------   -----------

Cash Flows from Investing Activities:
  Capital Expenditures                                        (25,222)        1,436
  Capitalized Software Expenditures                           (50,000)           --
                                                           ----------   -----------

  Net Cash [Used For] Provided from Investing Activities      (75,222)        1,436
                                                           ----------   -----------

Cash Flows from Financing Activities:
  Proceeds from Bridge Financing                                   --       750,000
  Payments on Bridge Financing                                     --      (750,000)
  Proceeds from Convertible Debentures                             --     3,000,000
  Proceeds from Sale of Software License                      500,000            --
  Proceeds from Exercise of Stock Options                     123,925         1,575
                                                           ----------   -----------

  Net Cash Provided from Financing Activities                 623,925     3,001,575
                                                           ----------   -----------

  Change in Cash and Cash Equivalents                        (145,107)    2,018,668

Cash and Cash Equivalents - Beginning of Periods            2,908,167       446,672
                                                           ----------   -----------

  Cash and Cash Equivalents - End of Periods               $2,763,060   $ 2,465,340
                                                           ==========   ===========



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

</TABLE>
                                         4

<PAGE>



COVER-ALL TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[UNAUDITED]
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[1] General

For a summary of significant  accounting  policies,  refer to Note 1 of Notes to
Consolidated  Financial Statements included in Cover-All  Technologies Inc. [the
"Company"]  Annual  Report on Form 10-K for the year ended  December  31,  1997.
While the Company  believes that the disclosures  presented are adequate to make
the information not misleading,  these consolidated  financial statements should
be read in conjunction with the consolidated  financial statements and the notes
thereto included in the Company's latest annual report.  Certain amounts for the
prior year have been reclassified to conform with the current period's financial
statement presentation. The financial statements include on a consolidated basis
the results of all  subsidiaries.  All material  intercompany  transactions have
been eliminated.

In the opinion of management, the accompanying consolidated financial statements
include all  adjustments  which are  necessary to present  fairly the  Company's
financial position as of March 31, 1998 and December 31, 1997 and the results of
operations  for the three month periods  ended March 31, 1998 and 1997,  and the
cash flows for the three  month  periods  ended  March 31,  1998 and 1997.  Such
adjustments are of a normal and recurring nature.  The results of operations for
the three month period ended March 31, 1998 are not  necessarily  indicative  of
the results to be expected for a full year.

[2] Convertible Notes & Debentures

On March 14, 1997, the Company obtained $750,000 in bridge financing through the
sale of 12 1/2% Convertible Notes to three major stockholders. The principal and
accrued  interest on the bridge  financing  was repaid in full on March 31, 1997
out of the proceeds from the financing discussed below.

On  March  31,  1997,  the  Company  issued  $3,000,000  of 12 1/2%  Convertible
Debentures [the  "Debentures"] to an  institutional  investor at face value. The
Debentures are immediately convertible,  in whole or in part, into shares of the
Company's  Common  Stock at a  conversion  price of $1.25 per share,  subject to
adjustment,  and mature on March 31, 2002.  Interest is payable  quarterly.  The
Debentures  contain certain  covenants  which restrict the Company's  ability to
incur debt,  grant liens,  pay dividends or other  restricted  payments and make
investments and  acquisitions.  The Company cannot redeem the Debentures for two
years and thereafter  may call the  Debentures  only if the closing price of the
Company's  Common  Stock  exceeds  $1.50  for  the  twenty  days  preceding  the
redemption  date. A portion of the proceeds  from the issuance was used to repay
the bridge  financing.  The remaining net proceeds were used for working capital
purposes.

[3] Sale of Stock and Warrants

On March 31, 1996, the Company was granted by Care Corporation  Limited ["Care"]
the exclusive license for the Care software for use in the workers' compensation
claims  administration  markets in Canada,  Mexico and Central and South America
[the "Care Software License"].  In exchange for this license, the Company issued
to Care 2,500,000  shares of the Company's Common Stock and the Company recorded
a software  license for $5,000,000.  The agreement was revised on March 14, 1997
and the Company  engaged Care as its exclusive  sales agent for a monthly fee of
$10,000 against commissions of 20%. Depending upon the level of revenue reached,
or not reached,  the Company had the right to repurchase all or a portion of the
shares issued to Care at $.01 per share. Under certain circumstances, based upon
aggregate  net sales in excess of $10  million  from a maximum  of two  separate
sales  during such  three-year  period,  the Company was  required to grant Care
five-year warrants to buy an additional 1,000,000 shares of the Company's Common
Stock at $2.00 per share.

In the fourth quarter of 1997, the Company made a strategic decision to allocate
its future  resources to its TAS 2000 and Classic  product lines rather than the
product line obtained via the Care Software  License.  In this regard,  on March
31, 1998, the Company  negotiated and consummated a buy back by Care of the Care
Software License.


                                        5

<PAGE>



COVER-ALL TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Sheet #2
[UNAUDITED]
------------------------------------------------------------------------------


[3] Sale of Stock and Warrants [Continued]

For the buy back of Care Software License by Care, the Company received $500,000
on March 31, 1998, and a $4,500,000 non-interest bearing non-recourse [except as
to collateral] note, payable in semi-annual installments of $500,000 which, when
discounted,  results  in a  principal  amount  of the  note of  $3,893,054.  The
discounted note is collateralized by unencumbered Cover-All stock owned by Care.
The number of shares  required  as  collateral  will vary,  such that the market
value of the  shares  held as  collateral  must  equal  150% of the  outstanding
balance.  The number of shares  required as collateral  will be adjusted at each
payment date based on the market price of the  Company's  shares and the balance
outstanding  on such date.  Based on the market price of the Company's  stock on
March 30, 1998, approximately 1,700,000 shares were pledged as collateral.  Upon
receipt of the first $500,000 payment under the agreement on March 31, 1998, the
Company lifted the aforementioned $.01 per share stock repurchase restriction on
the 2,500,000 shares.

In separate but related agreements,  Care agreed to grant to the Company certain
non-exclusive  re-seller rights to the Care software,  and the Company agreed to
grant to Care certain  non-exclusive  re-seller  rights to the TAS 2000 software
and Classic product lines.

Based on the above,  and due to the related  party  nature of the Care  Software
License buy back  agreement,  the Company  recorded  the  $1,143,000  difference
between the  carrying  value of the Care  Software  License  and the  discounted
$4,393,000  buy back  agreement  to  capital in excess of par value at March 31,
1998.

[4] Income Taxes

Pursuant to  Statement  of  Financial  Accounting  Standards  ["SFAS"]  No. 109,
"Accounting for Income Taxes," income tax expense [or benefit] for the period is
the sum of deferred tax expense [or benefit] and income taxes currently  payable
[or refundable]. Deferred tax expense [or benefit] is the change during the year
in a company's deferred tax liabilities and assets. Deferred tax liabilities and
assets are determined based on differences  between financial  reporting and tax
basis of assets and  liabilities,  and are measured  using the enacted tax rates
and laws that will be in effect when the differences are expected to reverse. At
December 31, 1997, the Company had  approximately  $3,000,000,  $14,000,000  and
$7,000,000 of operating tax loss carryforwards expiring in 2012, 2011, and 2010,
respectively.  No provision  for income  taxes is  reflected in these  financial
statements  as  the  Company  anticipates   utilizing  the  operating  tax  loss
carryforwards to offset any taxable income the Company may have.

[5] Net Income [Loss] Per Share

The Financial  Accounting Standards Board has issued SFAS No. 128, "Earnings per
Share," which is effective for financial  statements  issued for periods  ending
after December 15, 1997.  Accordingly,  earnings per share data in the financial
statements  for the three months ended March 31, 1998,  have been  calculated in
accordance  with SFAS No.  128.  Prior  periods  loss per  share  data have been
recalculated and it was determined that no adjustment was necessary.

SFAS No. 128 supersedes Accounting Principles Board Opinion No. 15, Earnings per
Share, and replaces its primary earnings per share with a new basic earnings per
share representing the amount of earnings for the period available to each share
of common stock outstanding  during the reporting period.  Basic earnings [loss]
per share is computed by dividing income [loss] available to common stockholders
by the weighted average number of common shares  outstanding  during the period.
SFAS No. 128 also requires a dual presentation of basic and diluted earnings per
share on the face of the statement of operations  for all companies with complex
capital  structures.  Diluted earnings per share reflects the amount of earnings
for the period  available to each share of common stock  outstanding  during the
reporting  period,  while giving effect to all dilutive  potential common shares
that were outstanding during the period, such as common shares that could result
from the potential exercise or conversion of securities into common stock.


                                        6

<PAGE>



COVER-ALL TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Sheet #3
[UNAUDITED]
------------------------------------------------------------------------------



[5] Net Income [Loss] Per Share [Continued]

The  computation  of diluted  earnings  per share  does not  assume  conversion,
exercise,  or contingent  issuance of securities that would have an antidilutive
effect on per share  amounts  [i.e.,  increasing  earnings per share or reducing
loss per share].  The dilutive  effect of  outstanding  options and warrants and
their   equivalents  are  reflected  in  dilutive  earnings  per  share  by  the
application  of the treasury  stock method which  recognizes the use of proceeds
that could be  obtained  upon  exercise of options  and  warrants  in  computing
diluted  earnings  per share.  It  assumes  that any  proceeds  would be used to
purchase common stock at the average market price during the period. Options and
warrants will have a dilutive  effect only when the average  market price of the
common  stock  during the period  exceeds the  exercise  price of the options or
warrants.   The  Company's  options  and  warrants  were  not  included  in  the
computation of loss per share for the three months ended March 31, 1997, because
to do so would have been antidilutive for that period, however, such options and
warrants  did dilute  earnings  per share for the three  months  ended March 31,
1998, however, the effect was not material.

The dilutive  effect of  convertible  debt is reflected in diluted  earnings per
share  by the  application  of the  if-converted  method.  While  the  Company's
convertible  debt had a  dilutive  effect  on  earnings  per share for the three
months  ended  March 31,  1998,  its  effect  was not  material.  The  Company's
convertible  debt did not  affect the loss per share  calculation  for the three
months ended March 31, 1997, because its inclusion would have been antidilutive.

[6] Presentation

Certain items have been  reclassified  from the prior period to conform with the
current period's presentation.



                      .   .   .   .   .   .   .   .   .   .

                                        7

<PAGE>



Item 2:

COVER-ALL TECHNOLOGIES INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
------------------------------------------------------------------------------





Total  revenues  for the three months  ended March 31, 1998 were  $2,871,000  as
compared to $883,000 for the same period in 1996, an increase of 225%.  Licenses
fees were  $1,409,000  for the three  months  ended March 31,  1998  compared to
$74,000 in the same  period in 1997 as a result of new  contracts  signed in the
first  quarter of 1998.  For the three months ended March 31, 1998,  maintenance
revenues were $895,000 compared to $587,000 in the same period of the prior year
due to an  increased  customer  base  and  new  contracts  signed.  Professional
services revenue  contributed  $567,000 in the three months ended March 31, 1998
compared to $222,000 in the first  quarter of 1997 as a result of new  contracts
signed in the first quarter of 1998.  Total Classic revenues were $1,744,000 for
the three  months  ended March 31,  1998 as  compared to $833,000  for the three
months ended March 31, 1997.  Total TAS 2000  revenues were  $1,127,000  for the
three  months  ended March 31, 1998 as compared to $50,000 for the three  months
ended March 31, 1997.

Cost of sales  increased to $1,414,000 for the three months ended March 31, 1998
as compared to $1,306,000 for the same period in 1997 as a result of an increase
in sales  volume.  There was no license fee  amortization  for the three  months
ended  March  31,  1998  due to the sale of the  Care  license  back to the Care
Corporation Limited. Non-cash capitalized software and license fees amortization
was  $172,000  for the three months ended March 31, 1998 as compared to $454,000
in the same period in 1997.

Research and development expenses were $264,000 for the three months ended March
31,  1998  compared to none for the same period in 1997 as a result of the start
of design and  feasibility  of  several  modules  of the TAS 2000  product  line
related to new contracts signed in the first quarter of 1998.

Sales and marketing  expenses were $336,000 for the three months ended March 31,
1998 as compared  to  $352,000  in the same  period of 1997 due to an  efficient
marketing and sales effort to improve the market shares of the Companys' product
lines, TAS 2000 and Classic.

General and  administrative  expenses  decreased to $417,000 in the three months
ended  March 31,  1998 as compared to $806,000 in the same period in 1997 due to
the ongoing effort to reduce overhead costs.

The  Company is  working  toward  continued  growth in 1998 and  beyond.  In the
Classic line, the Company is positioned to increase  market share as a result of
completion  of a project  making it Windows 95  compliant  and  maintaining  the
strengths upon which its current market acceptance is based.

The TAS  2000  product  line  offers a  complete  set of  policy  administration
applications  development products.  The TAS 2000 products are being marketed in
both  the  domestic  marketplace  and in the  United  Kingdom,  through  systems
integrators. A contract for the TAS 2000 product was announced on March 25, 1998
with  Cornhill  Insurance  PLC, a  wholly-owned  subsidiary  of Allianz AG. This
licensing and services agreement,  which is expected to be performed in 1998 and
is valued at $4,500,000 encompasses Cover-All's Total Administrative System [TAS
2000]  modules  including  Policy  Administration,   Client  Management,  Agency
Management,  Billing  Cash &  Commissions,  Statistical  Reporting  and  Pyramid
Services' Claims Administration.


                                        8

<PAGE>



COVER-ALL TECHNOLOGIES INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
------------------------------------------------------------------------------


Liquidity and Capital Resources

In 1996,  the Company was granted by Care, the Care Software  License.  The Care
software is an integrated suite of computer  applications for the administration
of claims processing of workers' compensation. The product has been successfully
deployed  in  Australia  and the  United  States in Third  Party  Administration
["TPA"]  and self  insured  environments,  including  city and state  government
operations as well as with major private corporations.  In the fourth quarter of
1997, the Company made a strategic  decision to allocate its future resources to
its TAS 2000 and Classic product lines rather than the product line obtained via
the Care  Software  License.  In this  regard,  on March 31,  1998,  the Company
negotiated  a buy back by Care of the Care  Software  License,  while  acquiring
worldwide  reseller rights,  excluding  Australia,  New Zealand,  and the United
States to the Care Software.

In  consideration  for the buy back of the Care  Software  License by Care,  the
Company  received  $500,000 on March 31,  1998,  and a  $4,500,000  non-interest
bearing  non-recourse  [except as to  collateral]  note,  payable in semi-annual
installments of $500,000 which,  when discounted,  results in a principal amount
of the note of $3,893,000. The discounted note is collateralized by unencumbered
Cover-All  stock owned by Care. The number of shares required as collateral will
vary,  such that the market  value of the shares held as  collateral  must equal
150% of the  outstanding  balance.  The number of shares  required as collateral
will be adjusted at each payment date based on the market price of the Company's
shares and the balance outstanding on the date. Based on the market price of the
Company's stock on March 30, 1998,  approximately  1,700,000 shares were pledged
as collateral.

Based on the above,  and due to the related  party  nature of the Care  Software
License buy back  agreement,  the Company  recorded  $1,143,000,  the difference
between  the  carrying  value of the Care  Software  License  of  $3,250,000  at
December 31, 1997, and the  discounted  $4,393,000 buy back agreement to capital
in excess of par value at March 31, 1998.

On March 31, 1997, the Company sold $3,000,000 of 12 1/2% Convertible Debentures
due March 2002 [the "Debentures"] to an institutional  investor.  The Debentures
were sold at face value, pay interest quarterly and are convertible, in whole or
in part, into shares of Common Stock of the Company at $1.25 per share,  subject
to  adjustment.  The Debentures  contain  certain  covenants  which restrict the
Company's  ability to incur  indebtedness,  grant liens,  pay dividends or other
defined restricted  payments and make investments and acquisitions.  The Company
cannot  redeem the  Debentures  for two years and  thereafter  may only call the
Debentures  if the closing  price of the  Company's  Common Stock for the twenty
business days preceding the redemption date exceeds $1.50. The net proceeds from
this financing were used for working capital purposes.

At March 31, 1998, the Company had working capital of $3,761,000, as compared to
working  capital of  $651,000  at March 31,  1997.  The  improvement  in working
capital  was  due to the  payments  received  on new  contracts  signed  and the
recording  of  $500,000  cash  received  as a result of the buy back of the Care
Software License by Care.

The Company  believes that its current cash balances and anticipated  cash flows
from continuing operations will be sufficient to meet normal operating needs for
the Company in 1998.

Statements in this Form 10Q, other than statements of historical information are
forward-looking  statements that are made pursuant to the safe harbor provisions
of  the  Private  Securities  Litigation  Reform  Act of  1995.  Forward-looking
statements  involve known and unknown risks which may cause the Company's actual
results in future  periods to differ  materially  from expected  results.  Those
risks  include,  among  others,  risk  associated  with  increased  competition,
customer   decisions,   delays  in   productivity   programs   and  new  product
introductions,  and other business factors beyond the Company's  control.  Those
and other risks are described in the Company's  filings with the  Securities and
Exchange  Commission  ["SEC"]  over  the last 12  months,  copies  of which  are
available from the SEC or may be obtained upon request from the Company.

                                        9

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COVER-ALL TECHNOLOGIES INC. AND SUBSIDIARIES
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PART II - OTHER INFORMATION

Item 6  - Exhibits and Reports on Form 8-K

(a)  Exhibits.

     27.  Financial Data Schedule.

(b) Reports on Form 8-K.

     The  Company  filed a Form 8-K on May 14,  1998 under Item 5 to reflect the
     signing of employment and services  agreements between the Company and each
     of Brian Magowan, its Chief Executive Officer,  Peter Lynch, its President,
     and Dalia Ophir, its Chief Technology Officer.

                                       10

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COVER-ALL TECHNOLOGIES INC. AND SUBSIDIARIES
------------------------------------------------------------------------------


SIGNATURES
------------------------------------------------------------------------------



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


                                    COVER-ALL TECHNOLOGIES INC.


Date:   May 14, 1998                By:/s/ Brian Magowan
                                       Brian Magowan, Chairman and Chief
                                       Executive Officer


Date:   May 14, 1998                By:/s/ John R. Nobel
                                       -----------------
                                       John R. Nobel, Chief Financial Officer

                                       11

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