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 quarter ended     September 30, 1997    Commission File Number   0-13124

                  COVER-ALL TECHNOLOGIES, INC. AND SUBSIDIARIES
             (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 November 10, 1997:

          16,751,822 shares of Common Stock, par value $.01 per share.


<PAGE>



COVER-ALL TECHNOLOGIES, INC. AND SUBSIDIARIES
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INDEX TO FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1997.
------------------------------------------------------------------------------





PART I:  FINANCIAL INFORMATION

Item 1.  Financial Statements

   Consolidated Balance Sheets as of September 30, 1997 [Unaudited]
   and December 31, 1996 [Audited].................................. 1.....  2

   Consolidated Statements of Operations for the Three and Nine Months
   Ended September 30, 1997 and 1996 [Unaudited].................... 3.....

   Consolidated Statements of Cash Flows for the Nine Months Ended
   September 30, 1997 and 1996 [Unaudited].......................... 4.....

   Notes to Consolidated Financial Statements [Unaudited]........... 5.....  8

Item 2.  Managements' Discussion and Analysis of the Financial
         Condition and Results of Operations........................ 9..... 10

PART II: OTHER INFORMATION..........................................11.....

SIGNATURES..........................................................12.....





                         . . . . . . . . . . . . . . .


<PAGE>



PART I:  FINANCIAL INFORMATION

Item 1:  Financial Statements

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


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

<TABLE>


                                                             September 30, December 31,
                                                               1 9 9 7        1 9 9 6
                                                              [Unaudited]    [Audited]
Assets:
Current Assets:
<S>                                                           <C>          <C>        
  Cash and Cash Equivalents                                   $1,102,698   $   446,672
  Accounts Receivable [Less Allowance for Doubtful Accounts
   of $76,969 and $43,870]                                     1,659,981     1,585,398
  Prepaid Expenses                                               244,957         7,161
                                                              ----------   -----------

  Total Current Assets                                         3,007,636     2,039,231
                                                              ----------   -----------

Property and Equipment - At Cost:
  Furniture, Fixtures and Equipment                            2,625,678     3,072,706
  Less: Accumulated Depreciation                              (2,358,238)   (2,662,713)
                                                              ----------   -----------

  Property and Equipment - Net                                   267,440       409,993
                                                              ----------   -----------

Software License [Less Amortization of $1,500,000
  and $750,000]                                                3,500,000     4,250,000
                                                              ----------   -----------

Capitalized Software [Less Amortization of $1,617,142
  and $1,005,964]                                                866,772     1,477,950
                                                              ----------   -----------

Other Assets                                                      59,335        66,181
                                                              ----------   -----------

  Total Assets                                                $7,701,183   $ 8,243,355
                                                              ==========   ===========



</TABLE>

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

                                         1

<PAGE>



COVER-ALL TECHNOLOGIES, INC. AND SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
------------------------------------------------------------------------------
<TABLE>



                                                             September 30, December 31,
                                                                1 9 9 7        1 9 9 6
                                                              [Unaudited]    [Audited]
Liabilities and Stockholders' Equity:
Current Liabilities:
<S>                                                           <C>          <C>        
  Accounts Payable                                            $  452,099   $   536,172
  Accrued Liabilities                                          1,156,379     1,614,612
  Unearned Revenue                                               640,364     1,181,575
                                                              ----------   -----------

  Total Current Liabilities                                    2,248,842     3,332,359
                                                              ----------   -----------

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

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

Stockholders' Equity:
  Common Stock, $.01 Par Value, Authorized 30,000,000 Shares,
   Issued 17,356,308 and 17,351,883 Shares                       173,563       173,519

  Capital In Excess of Par Value                              27,635,989    27,258,352

  Accumulated Deficit                                        (22,790,004) (19,953,668)

  Treasury Stock - At Cost - 633,986 Shares                   (2,567,207)   (2,567,207)
                                                              ----------   -----------

  Total Stockholders' Equity                                   2,452,341     4,910,996
                                                              ----------   -----------

  Total Liabilities and Stockholders' Equity                  $7,701,183   $ 8,243,355
                                                              ==========   ===========


</TABLE>


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

                                         2

<PAGE>



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


CONSOLIDATED STATEMENTS OF OPERATIONS
[UNAUDITED]
------------------------------------------------------------------------------
<TABLE>


                                       Three months ended          Nine months ended
                                          September 30,              September 30,
                                          -------------              -------------
                                        1 9 9 7     1 9 9 6       1 9 9 7     1 9 9 6
                                        -------     -------       -------     -------

Revenues:
<S>                                   <C>         <C>          <C>         <C>        
  Licenses                            $  994,203  $   27,941   $ 1,480,711 $   735,183
  Maintenance                            674,397     490,908     1,889,575   1,526,345
  Professional Services                  389,606     533,609       908,834   1,807,994
                                      ----------  ----------   ----------- -----------

  Total Revenues                       2,058,206   1,052,458     4,279,120   4,069,522
                                      ----------  ----------   ----------- -----------

Costs and Expenses:
  Cost of Sales                        1,030,003     863,223     3,579,068   2,253,849
  Research and Development                    --     676,388            --   2,379,421
  Sales and Marketing                    540,850     489,155     1,349,320     810,891
  General and Administrative             727,246   1,069,983     2,187,068   2,750,124
                                      ----------  ----------   ----------- -----------

  Total Costs and Expenses             2,298,099   3,098,749     7,115,456   8,194,285
                                      ----------  ----------   ----------- -----------

Loss from Continuing Operations         (239,893) (2,046,291)   (2,836,336) (4,124,763)

Loss from Discontinued Operations             --    (392,872)           --    (392,872)
                                      ----------  ----------   ----------- -----------

  Net Loss                            $ (239,893) $(2,439,163) $(2,836,336)$(4,517,635)
                                      ==========  ===========  =========== ===========

  Net Loss Per Share from
   Continuing Operations              $   (0.014) $   (0.122)  $    (0.170)$    (0.289)
                                      ==========  ==========   =========== ===========

  Net Loss Per Share                  $   (0.014) $   (0.146)  $    (0.170)$    (0.317)
                                      ==========  ==========   =========== ===========

  Weighted Average Number of
   Common Shares Outstanding          16,720,901  16,716,700    16,719,731  14,248,605
                                       ==========  ==========   =========== ===========
</TABLE>




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

                                         3

<PAGE>



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


CONSOLIDATED STATEMENTS OF CASH FLOWS
[UNAUDITED]
------------------------------------------------------------------------------
<TABLE>


                                                                  Nine months ended
                                                                    September 30,
                                                                1 9 9 7       1 9 9 6
                                                                -------       -------
Cash Flows from Operating Activities:
<S>                                                           <C>          <C>         
  Net Loss from Continuing Operations                         $(2,836,336) $(4,124,763)
  Adjustments to Reconcile Net Loss to Net Cash
   Used for Operating Activities
   Depreciation                                                   143,755       261,823
   Amortization of Capitalized Software and Software License    1,361,178       820,345
   Compensation Expense Related to Issuance of Stock Options      369,688            --
   Accounts Receivable                                            (74,583)      898,342
   Income Taxes Receivable                                             --     2,300,000
   Deferred Income Taxes                                               --       (20,000)
   Prepaid Expenses                                              (237,796)     (125,319)
   Other Assets                                                     6,846       314,653
   Accounts Payable                                               (84,073)     (278,893)
   Accrued Liabilities                                           (458,233)   (1,691,008)
   Unearned Revenue                                              (541,211)      167,842
                                                               ----------   -----------

  Net Cash Used for Continuing Operating Activities            (2,350,765)   (1,476,978)
                                                               ----------   -----------

Loss from Discontinued Operations                                      --      (392,872)

Decrease in Net Liabilities of Discontinued Operations                 --    (1,670,028)
                                                               ----------   -----------

  Net Cash Used for Discontinued Operating Activities                  --    (2,062,900)
                                                               ----------   -----------

  Net Cash Used for Continuing Activities                      (2,350,765)   (3,539,878)
                                                               ----------   -----------

Cash Flow from Investing Activities: 
  Capital Expenditures                                             (1,202)      (81,278)
  Capital Software Expenditures                                        --    (1,108,540)
                                                               ----------   -----------

  Net Cash Used for Investing Activities                           (1,202)   (1,189,818)
                                                               ----------   -----------

Cash Flows from Financing Activities:
  Proceeds from the Bridge Financing and the Sale of
   Convertible Debentures                                       3,750,000            --
  Payments on the Bridge Financing                               (750,000)           --
  Net Proceeds from Issuance of Common Stock                        7,993     4,738,495
                                                               ----------   -----------

  Net Cash Provided from Financing Activities                   3,007,993     4,738,495
                                                               ----------   -----------

  Change in Cash and Cash Equivalents                             656,026         8,799

Cash and Cash Equivalents - Beginning of Periods                  446,672     1,576,745
                                                               ----------   -----------

  Cash and Cash Equivalents - End of Periods                   $1,102,698   $ 1,585,544
                                                               ==========   ===========

</TABLE>

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

                                         4

<PAGE>



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


CONSOLIDATED STATEMENTS OF CASH FLOWS
[UNAUDITED]
------------------------------------------------------------------------------




Supplemental Disclosures of Non-Cash Investing and Financing Activities in 1996:

Financing
In connection  with the  discontinuance  of ISD, the Company issued Common Stock
and Warrants for $6,978,340 as a result of the restructuring agreement [See Note
3].

Investing
The Company acquired a software license from Care by issuing Common Stock valued
at $5,000,000 [See Note 4].




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

                                         5

<PAGE>



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



[1] General

For a summary of significant  accounting  policies,  refer to Note 1 of Notes to
Consolidated  Financial Statements included in Cover-All  Technologies Inc. [the
"Company"]  Annual  Report on Form 10-K for the year ended  December  31,  1996.
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  September  30,  1997 and  December  31, 1996 and the
results of operations  for the three and nine month periods ended  September 30,
1997 and 1996, and the cash flows for the nine month periods ended September 30,
1997 and 1996.  Such  adjustments  are of a normal  and  recurring  nature.  The
results of  operations  for the three and nine month period ended  September 30,
1997 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 are being used for working
capital purposes.

[3] Discontinued Operations

In March 1996, the Company  entered into a series of agreements  which provided
for the transfer and  discontinuance of its Insurance  Services Division ["ISD"]
operations  and the  issuance  of the  Company's  Common  Stock and  Warrants to
certain customers of the ISD business in exchange for the release of the Company
from its obligations to provide  insurance  services to ISD customers and to The
Robert Plan  Corporation  in exchange for the  settlement  and  dismissal of two
lawsuits with The Robert Plan  Corporation.  Effective March 1, 1996 the Company
discontinued providing insurance processing services to the automobile insurance
industry and  reflected  those  activities  as  discontinued  operations  in its
Financial Statements in December 1995.

                                        6

<PAGE>



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



[3] Discontinued Operations [Continued]

As part of the  restructuring  transactions  ["the  Restructuring"]  the Company
transferred certain assets, employees, contracts and leased premises relating to
its ISD business to a subsidiary of The Robert Plan Corporation,  which replaced
the Company as the  provider of  insurance  services  to the ISD  customers.  In
exchange for settling the  lawsuits,  releasing  the  Company's  obligations  to
provide insurance services under its contracts and executing mutual releases the
Company  issued to  certain  of the ISD  customers  and  certain  parties to the
litigation;  (a) a total of 3,256,201  shares of the Company's Common Stock, (b)
five-year Warrants to purchase up to an additional aggregate of 1,553,125 shares
of the  Company's  Common Stock at $2.00 per share and (c) cash of $2.5 million.
The holders of these  securities  can  request  the  Company to  register  these
securities with such registration  costs to be paid by the Company.  The Company
had the option,  exercisable for a period of six months,  to (i) purchase 50% of
the  aforementioned  3,256,201  shares at a cash price  equal to the  greater of
$3.00 or 50% of the then market price of a share of the  Company's  Common Stock
and (ii)  acquire 50% of the  1,553,125  Warrants at a cash price equal to $1.00
per  Warrant.  On March  31,  1996,  the  Company  assigned  its  aforementioned
repurchase  option  applicable  to the  Company's  Common  Stock and Warrants to
Software  Investments  Limited ["SIL"].  SIL  subsequently  exercised all of the
options to purchase the Company's Common Stock and Warrants as discussed in Note
4. As a result of the issuance of shares  described in Note 4, the  antidilution
provisions of the warrants  required an  adjustment of shares to 1,725,694  from
1,553,125 and a price  adjustment to $1.80 from $2.00 per share.  Further,  as a
result of the issuance of the 12 1/2% Convertible  Debentures  discussed in Note
2, the Warrants  required an adjustment to the number of shares  purchasable  to
902,979 and the exercise price to $1.72 per share.

[4] Sale of Stock and Warrants

On March 31,  1996,  the  Company  entered  into a series of  transactions  with
Software  Investment  Limited  ["SIL"]  and Care  Corporation  Limited  ["Care"]
whereby the Company:

[A] Sold to SIL for total  proceeds of $3,022,391:  (i) 1,412,758  shares of the
Company's  Common  Stock for $2.00 per  share  and (ii)  five-year  warrants  to
purchase  an  aggregate  of  196,875  shares  of  the  Company's   Common  Stock
exercisable at $2.00 per share for $1.00 per warrant ($196,875).

[B] Assigned to SIL the rights it retained in the Restructuring  [see Note 3] to
repurchase  within six months 1,628,100 shares of the Company's Common Stock for
the  greater of $3.00 per share or 50 percent  of the then  market  price of the
Company's  Common Stock and its rights to purchase from the warrant  holders for
$1.00 per share  five-year  warrants to acquire  776,562 shares of the Company's
Common  Stock at $2.00  per  share.  As a result  of the  issuance  of the above
mentioned  shares,  the  antidilution  provisions  of the  Warrants  required an
adjustment from 776,562 shares at $2.00 per share to 862,847 shares at $1.80 per
share.  Further,  as a  result  of  the  issuance  of the  12  1/2%  Convertible
Debentures  discussed  in Note 2, the  Warrants  required an  adjustment  to the
number of shares  purchasable  to 206,152  and the  exercise  price to $1.91 per
share. In July 1997 SIL assigned the Warrants to purchase  100,000 shares of the
206,152 shares at $1.91 per share to three independent investors.

On May 1, 1996, SIL acquired  1,628,100  shares of the Company's Common Stock at
$3.00 per share,  and at $1.00 per Warrant,  862,847 Warrants to acquire 862,847
shares of the Company's  Common Stock at $1.80 per share.  SIL  exercised  these
Warrants  on May 6, 1996,  resulting  in the  Company  receiving  $1,553,124  in
additional equity.

                                        7

<PAGE>



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



[4] Sale of Stock and Warrants [Continued]

In addition,  on March 31, 1996,  the Company was granted by Care the  exclusive
license for the Care  software  for use in the workers'  compensation  and group
health  claims  administration  markets in Canada,  Mexico and Central and South
America.  In exchange for this  license,  the Company  issued to Care  2,500,000
shares of the  Company's  Common  Stock.  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,  the  Company  will  have the  right to  repurchase  at $.01 per  share
portions of the shares issued to Care based upon the level of revenues  actually
achieved. 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 will be 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.

[5] Litigation

In March 1994, Material Damage Adjustment  Corporation  ["MDA"], a subsidiary of
The Robert Plan  Corporation  and a  subcontractor  for the  Company  performing
claims processing work, instituted an action in the Superior Court of New Jersey
seeking  injunctive relief requiring that the Company turn over to MDA in excess
of $1 million that the Company had withheld from certain  claims fees  allegedly
owed to MDA. This action arose out of the Company's  servicing contract with the
Market Transition  Facility of New Jersey ["MTF"].  The Company had withheld the
funds as a  set-off  to cover  unpaid  invoices  for  data  processing  services
rendered by the Company for MDA. MDA also added a claim for  approximately  $2.5
million of  surcharge  fees paid to the Company by the MTF.  The MTF was brought
into the case to resolve  disputes  between  MTF and MDA over  refunds of claims
fees  paid on  claims  later  closed  without  payment  ["CWP's"].  The  Company
vigorously  contested  MDA's  claims and asserted  counterclaims  against MDA to
establish the Company's entitlement to the disputed sums.

In May 1994,  the Company  filed an action in the  Superior  Court of New Jersey
against Lion Insurance Company,  National Consumer Insurance Corporation and The
Robert Plan Corporation  seeking payment of unsatisfied  invoices under an April
1991 agreement  totaling  approximately $2.7 million.  Under the agreement,  the
Company  agreed to provide data  processing  services  for a three-year  term in
support of Lion Insurance  Company's  "depopulation  pool" automobile  insurance
business in New Jersey.  Lion  Insurance  Company is a subsidiary  of The Robert
Plan Corporation whose affiliate,  National Consumer Insurance Corporation,  has
taken  over the  "depopulation  pool"  business.  The  Robert  Plan  Corporation
guaranteed Lion's performance and payment.

On March 1, 1996, the two lawsuits  described  above were settled as part of the
overall  settlement with certain of the Company's  insurance  services customers
[See Note 3].

On February 2, 1995, Sol M. Seltzer  commenced an action in the Supreme Court of
New York  against  Mr.  Krieger,  the then  Chairman  of the  Board  and  former
President  of the  Company,  and each of the other then  members of the Board of
Directors.  The plaintiff,  Sol M. Seltzer, who purported to sue derivatively on
behalf of the Company and  COVER-ALL,  sought among other  things,  compensatory
damages  in an  amount to be  determined  at trial and  punitive  damages  in an
aggregate  amount of $12  million.  Sol M. Seltzer was a  vice-president  of the
Company and a director of  COVER-ALL  until he resigned  from such  positions in
late 1994. The plaintiff alleged,  among other things, breach of fiduciary duty,
waste and  mismanagement,  as well as alleged wrongful acts by the Board and the
former  President,  including  among other  things,  self-dealing  and misuse of
corporate funds by the former President.  The Company, and the other defendants,
contested Mr.  Seltzer's claims and on July 23, 1996 their motion to dismiss the
case was  granted.  Mr.  Seltzer  attempted  to file a notice of appeal from the
order of  dismissal,  but  failed  to do so in a  timely  manner.  He has  since
motioned the court to recognize his notice of appeal and it is anticipated  that
the court will rule on such motion in the near future.

                                        8

<PAGE>



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



[5] Litigation [Continued]

On February 6, 1995,  the Company  commenced an action in the Superior  Court of
New Jersey against Sol M. Seltzer,  a former vice president of the Company and a
director   of    COVER-ALL,    alleging    fraud,    mismanagement,    negligent
misrepresentation  and breach of fiduciary duty with respect to the  development
and implementation of COVER-ALL's TAS 2000 software product. The Company claimed
compensatory  and punitive  damages in an amount to be determined at trial.  The
case was  largely  inactive  pending  the motion to dismiss  Seltzer's  New York
action. After the dismissal of the New York case brought by Seltzer, the Company
voluntarily dismissed the New Jersey case without prejudice.

In addition to the above lawsuits, the Company is named as defendant in a number
of legal actions  arising from the ISD operations which were transferred to 
The Robert Plan Corporation in 1996.  All of these actions have been considered 
in  establishing liabilities.  Management and its legal counsel are of the 
opinion  that these  actions will not have a material  adverse  effect on the 
Company's  financial position or results of operations.

[6] Income Taxes

For 1997 and 1996,  no income tax benefit  relative to the  Company's  operating
losses has been reflected in the Statement of Operations.  A valuation allowance
was  provided  equal  to the tax  benefit  that the loss  generated,  since  the
realization of such benefit would be dependent upon achieving  future  operating
profits which cannot be reasonably assured.

[7] Net Loss Per Share

Net loss per share is based on the weighted average number of common shares and,
where  applicable,  common share equivalents  outstanding  during the period. In
February 1997, the Financial  Accounting  Standards  Board issued  Statement No.
128, "Earnings per Share." The Statement is designed to simplify the computation
of earnings  per share and is effective  for year ends after  December 15, 1997.
With respect to the Company's  operating losses, the inclusion of certain shares
from options,  warrants and Debentures would have reduced the loss per share and
thus have been  excluded.  As a result,  the impact of Statement  No. 128 on the
loss  per  share  calculation  is  not  expected  to  be  material  when  it  is
implemented.





                          . . . . . . . . . . . . . . .

                                        9

<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  September  30,1997 were $2,058,206 as
compared to $1,052,458 for the same period in 1996.  Licenses fees were $994,203
for the three months ended  September  30, 1997  compared to $27,941 in the same
period  in 1996 as a result of two new  Classic  contracts  being  signed in the
third quarter of 1997 and no new contracts  being signed in 1996.  For the three
months ended September 30, 1997,  maintenance revenues were $674,397 compared to
$490,908 due to increased  fees to  customers  and new contract  signed in 1997.
Professional  services  revenue  contributed  $389,606 in the three months ended
September 30, 1997 compared to $533,609 in the third quarter of 1996 as a result
of the completion of modifications  for the one major TAS 2000 customer in 1996.
Total Classic  revenues were $2,008,205 for the three months ended September 30,
1997 as compared to $652,585  for the three  months  ended  September  30, 1996.
Total TAS 2000  revenues  were $50,001 for the three months ended  September 30,
1997 as compared to $399,873 for the three months ended  September 30, 1996. For
the nine months  ended  September  30,  1997,  total  revenues  were  $4,279,120
compared to  $4,069,522  in the same period of the prior year as a result of two
new  Classic  contracts  signed  in the third  quarter  of 1997.  Total  Classic
revenues were $3,829,119 for nine months ended September 30, 1997 as compared to
$2,398,154 in the same period in 1996. Total TAS 2000 revenues were $450,001 for
the first nine months of 1997 as compared  to  $1,671,368  in the same period in
1996.

Cost of sales  increased to  $1,030,003  and  $3,579,068  for the three and nine
months ended  September 30, 1997 as compared to $863,223 and  $2,253,849 for the
same  periods  in 1996 as a  result  of  significant  increases  in  capitalized
software and license fees  amortization,  and  compensation  expense relating to
dedication of staff originally  involved in research and development for the one
completed TAS 2000 contract to  maintenance  and  professional  services for the
Classic product. Non-cash capitalized software and license fees amortization was
$453,726 and $1,361,179  for the three and nine months ended  September 30, 1997
as compared to $346,488 and $820,347 in the same periods in 1996.

No research and development expenses were recorded for the three and nine months
ended  September  30,  1997  compared to $676,388  and  $2,379,421  for the same
periods in 1996 as a result of  completion  of  several  modules of the TAS 2000
product line and significant staff reductions in the development  group.  Future
development of additional TAS 2000 modules will be customer driven.

Sales and marketing  expenses  increased to $540,850 and $1,349,320 in the three
and nine months ended September 30, 1997 as compared to $489,155 and $810,891 in
the same  periods  of 1996 due to an  increased  marketing  and sales  effort to
improve the market share of all the Company's  product lines. The Company is now
utilizing distributors and outside consultants to market its products.

General and administrative  expenses decreased to $727,246 and $2,187,068 in the
three and nine months ended  September  30, 1997 as compared to  $1,069,983  and
$2,750,124  in the same  periods  in 1996 due to the  ongoing  effort  to reduce
overhead costs.

The  Company is  working  toward  continued  growth in 1997 and  beyond.  In the
Classic line, the Company is positioned to increase  market share as a result of
completion  of the project  making it Windows 95 compliant and  maintaining  the
strengths upon which its current market  acceptance is based. A sales force is 
being recruited to market the Classic product line nationwide. The Classic 
product line is a set of Local Area Network ["LAN"] based PC software  packages 
designed to automate the rating and issuance tasks in the property and casualty 
insurance industry.

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.


                                       10

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



The Company is also marketing the Care software in Canada.  The Care software is
an integrated suite of computer  applications for the  administration of claims
processing  of workers'  compensation.  The software  utilizes the "open system"
environment and, in particular, relational database technology. A feature of the
software is the integration of advanced managed care algorithms and databases.

The preceding forward-looking statements [as such term is defined in the Private
Securities  Litigation  Reform  Act] are  subject to the  occurrence  of certain
contingencies  which may not occur in the time frames  anticipated or otherwise,
and, as a result,  could cause  actual  results to differ  materially  from such
statements.  These  contingencies  include  successful  completion of continuing
developmental  efforts under existing software contracts within anticipated time
frames or otherwise, the successful negotiation, execution and implementation of
anticipated  new software  contracts,  the successful  utilization of additional
personnel  in the  marketing  and  technical  areas,  the  continuing  favorable
responses to the Company's  products from existing and potential new  customers,
and the  Company's  ability to  complete  development  and sell and  license its
products at prices which result in sufficient revenues to realize profits.

Liquidity and Capital Resources

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 is being used for working capital purposes.

Cash flows from continuing  operations were negative in the first nine months of
1997 by  approximately  $2.4  million as  compared  with  negative  cash flow of
approximately  $1.5 million in the same period in 1996 primarily due to the fact
that an income tax refund of $2.3 million was  received in the first  quarter of
1996.

The Company believes that the proceeds from the sale of the Debentures, its 
current cash balances and anticipated cash flows from continuing operations will
be sufficient to meet normal operating needs for the continuing COVER-ALL 
business in 1997.  The company is evaluating alternatives for raising additional
working capital.

                                       11

<PAGE>



COVER-ALL TECHNOLOGIES INC. AND SUBSIDIARIES
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 August 11, 1997 under Item 4 to reflect the
     engagement of Moore  Stephens,  P. C. as the Company's  auditors to replace
     Ernst & Young, LLP effective August 4, 1997 and under Item 5 to reflect the
     events of the annual meeting of stockholders.

                                       12

<PAGE>


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:   November 14, 1997           By:/s/ Brian Magowan
                                       Brian Magowan, Chairman and Chief
                                       Executive Officer


Date:   November 14, 1997           By:/s/ Mark D. Johnston
                                       --------------------
                                       Mark D. Johnston, Chief Financial Officer


                                       13

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