<PAGE>

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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                                   FORM 10-Q
                                ----------------


(Mark One)

[x]      Quarterly report pursuant to section 13 of 15(d) of the Securities
         Exchange Act of 1934 for the quarterly period ended March 31, 1998

[]       Transition report pursuant to section 13 of 15(d) of the Securities
         Exchange Act of 1934 for the transition period from to



                           Commission File No. 0-21038


                                Network Six, Inc.
             (Exact name of registrant as specified in its charter)



    Rhode Island                                              05-0366090
(State or other jurisdiction of           (I.R.S. Employer Identification No.)
 incorporation or organization)


                 475 Kilvert Street, Warwick, Rhode Island 02886 
           (Address of principal executive offices, including zip code)

                                 (401) 732-9000
              (Registrant's telephone number, including area code)



Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 of 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days. Yes X . No .
                                                  ---     ---
As of March 31, 1998, there were 749,503 shares of the registrant's Common
Stock, $.10 par value, outstanding.


                                       1

<PAGE>

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                         PART 1 - FINANCIAL INFORMATION

Item 1.  Financial Statements

                                Network Six, Inc.
                            Condensed Balance Sheets
<TABLE>
<CAPTION>

Assets                                                                Mar. 31,              Dec. 31, 1997
------                                                                1998
                                                                      -----------------     -----------------
Current assets:                                                         (unaudited)
<S>                                                                 <C>                   <C>
     Cash                                                           $          466,315    $        1,291,924
     Contract receivables, less allowance for doubtful
          accounts of $50,000 at March 31, 1998 and
          December 31, 1997                                                    779,956             2,011,379
     Costs and estimated earnings in excess of billings
          on contracts                                                       1,661,017             1,388,515
     Other assets                                                              159,535               244,257
                                                                      -----------------     -----------------
          Total current assets                                               3,066,823             4,936,075
                                                                      -----------------     -----------------

Property and equipment
     Computers and equipment                                                   512,985               506,484
     Furniture and fixtures                                                    156,833               167,558
     Leasehold improvements                                                     20,191                20,191
                                                                      -----------------     -----------------

                                                                               690,009               694,233
Less: accumulated depreciation and amortization                                597,637               627,146
                                                                      -----------------     -----------------
          Net property and equipment                                            92,372                67,087

Deferred taxes                                                                 391,475               391,475

Contract receivables and costs in excess of billings
     on Hawaii contract                                                      3,459,382             3,459,382
Other assets                                                                   426,136               438,084
                                                                      -----------------     -----------------

                                                                    $        7,436,188    $        9,292,103
                                                                      =================     =================

</TABLE>


                                       2

<PAGE>


<TABLE>
<CAPTION>


                                                                              Mar. 31, 1998       Dec. 31, 1997
                                                                            -----------------   ----------------
                                                                               (unaudited)

<S>                                                                                  <C>           <C>
Liabilities and Stockholders' Equity
Current liabilities:
     Notes payable to bank                                                           $     -       $  1,160,000
     Current installment of obligations under capital leases                          85,286             82,690
     Accounts payable                                                                156,759            188,377
     Accrued salaries and benefits                                                   430,953            449,133
     Accrued subcontractor expense                                                   499,141          1,352,393
     Note payable - short term                                                       100,000            163,871
     Other accrued expenses                                                          342,438            342,465
     Billings in excess of costs and estimated earnings on contracts                 184,150            155,754
     Income taxes payable                                                             88,619             13,338
     Deferred taxes                                                                  545,869            545,869
     Preferred stock dividends payable                                               543,287            460,068
                                                                            -----------------   ----------------
          Total current liabilities                                                2,976,502          4,913,958
                                                                            -----------------   ----------------

Obligations under capital leases, excluding current installments                      84,572            104,003
Note payable - long term                                                             742,239            742,239
Accounts payable to Hawaii contractors                                               576,483            576,483
                                                                            -----------------   ----------------
          Total Liabilities                                                        4,379,796          6,336,683
                                                                            -----------------   ----------------
Stockholders' equity:
     Series A convertible preferred stock, $3.50 par value. Authorized
          857,142.85 shares; issued and outstanding 714,285.71 shares at March
          31, 1998 and December 31, 1997; liquidation of $3.50 per share plus
          unpaid and accumulated dividends                                         2,235,674          2,235,674

     Common stock, $.10 par value. Authorized
          4,000,000 shares; issued 749,503 shares at
          March 31, 1998 and 734,294 at
          December 31, 1997                                                           74,950             73,429
Additional paid-in capital                                                         1,713,144          1,670,939
Retained earnings (accumulated deficit)                                            (967,376)        (1,024,622)
                                                                            -----------------   ----------------
          Total stockholders' equity                                               3,056,392          2,955,420
          Total Liabilities & Stockholders' Equity                             $   7,436,188       $  9,292,103
                                                                            -----------------   ----------------
                                                                            -----------------   ----------------

</TABLE>


                                       3

<PAGE>




                                       Network Six, Inc.
                                Condensed Statements of Income
                                          (Unaudited)
<TABLE>
<CAPTION>

                                                          Three months           Three months
                                                         ended 3/31/98          ended 3/31/97
                                                     ---------------------   -------------------
<S>                                                     <C>                     <C>
Contract revenue earned                                 $       2,221,618       $     1,414,185
Cost of revenue earned                                          1,446,656               973,140
                                                     ---------------------   -------------------
     Gross profit                                                 774,962               441,045

Selling, general & administrative expenses                        557,824               526,331
                                                     ---------------------   -------------------
     Income (loss) from operations                                217,138              (85,286)

Other deductions (income)
     Interest expense                                              29,187                50,658
     Interest earned                                             (50,124)               (3,757)
                                                     ---------------------   -------------------
          Income (loss) before income taxes                       238,075             (132,187)

Income taxes                                                       97,610                    --
                                                     ---------------------   -------------------

Net income                                             $          140,465      $      (132,187)
                                                     ---------------------   -------------------
                                                     ---------------------   -------------------

Net income (loss) per share:
Basic                                                  $             0.08      $         (0.25)
                                                     ---------------------   -------------------
                                                     ---------------------   -------------------
Diluted                                                $             0.08      $         (0.25)
                                                     ---------------------   -------------------
                                                     ---------------------   -------------------

Shares used in computing net income per share:
Basic                                                             749,503               721,192
                                                     ---------------------   -------------------
                                                     ---------------------   -------------------
Diluted                                                           749,503               721,192
                                                     ---------------------   -------------------
                                                     ---------------------   -------------------

Preferred dividends declared                           $           83,219      $         46,233
                                                     ---------------------   -------------------
                                                     ---------------------   -------------------

</TABLE>


                                       4

<PAGE>




                               Network Six, Inc.
                     Condensed Statements of Cash Flow
                                 (Unaudited)
<TABLE>
<CAPTION>

                                                                         Three months         Three months
                                                                            ended                ended
                                                                           3/31/98              3/31/97
                                                                      -----------------    ------------------
<S>                                                                     <C>                   <C>
  Net Income (loss)                                                     $       140,465       $    (132,187)
  Adjustment to reconcile net income (loss) to net cash
         provided by operating activities:
            Depreciation and amortization                                        14,522               24,162
            Provision for doubtful accounts                                      -                   (47,856)
            Loss on sale/disposal of fixed assets                                 4,316                4,454
            Changes in operating assets and liabilities:
            Contract receivables                                              1,231,423              895,847
            Cost and estimated earnings
                 in  excess of billings on contracts                          (272,502)              459,958
            Income taxes receivable                                                   -               26,003
            Other current assets                                                 84,722               14,390
            Other assets                                                          11,948            (520,505)
            Accounts payable                                                    (31,618)            (148,060)
            Accrued salaries and benefits                                       (18,180)             (33,141)
            Accrued subcontractor exp.                                         (853,252)              19,659
            Other notes payable                                                 (63,871)            (34,681)
            Other accrued expenses                                                  (27)            (67,579)
            Accrued restructuring                                                     -              (5,383)
            Billings in excess of costs
              and estimated earnings on contracts                                28,396               32,937
            Income taxes payable                                                 75,281                   --
                                                                      ------------------    -----------------
                Net cash provided by operating activities                       351,623              488,018
                                                                      ------------------    -----------------

  Cash flows from investing activities:
     Cash Proceeds from Sale/Disposal of Capital Assets                             --                 1,449
     Capital expenditures                                                      (44,123)                   --
                                                                      ------------------    -----------------
                                                                      ------------------    -----------------
                Net cash provided by (used in) investing  activities            (44,123)                1,449
                                                                     ------------------    -----------------
                                                                     ------------------    -----------------


</TABLE>

                                       5

<PAGE>

<TABLE>
<CAPTION>
                                                                         Three months         Three months
                                                                            ended                ended
                                                                           3/31/98              3/31/97
                                                                      ------------------   -----------------
<S>                                                                     <C>                 <C>     
Cash flows from financing activities:
     Principal payments on capital lease obligations                           (16,835)            (15,932)
     Net payments on note payable to bank                                   (1,160,000)                  --
     Proceeds from issuance of common stock                                     43,726                   --
                                                                     ------------------    -----------------
          Net cash used in financing activities                             (1,133,109)             (15,932)
                                                                      ------------------    -----------------
    Net increase (decrease) in cash                                           (825,609)              473,535
    Cash at beginning of period                                               1,291,924              127,581
                                                                      ------------------    -----------------
                                                                      ------------------    -----------------
    Cash at end of period                                               $       466,315        $     601,116
                                                                      ------------------    -----------------

  Supplemental cash flow information: Cash (received) paid 
         during the period for:
                Income taxes                                                  $  23,180        $     (26,003)
                Interest                                                         25,678               50,772
                                                                      ------------------    -----------------
                                                                      ------------------    -----------------

</TABLE>


                                       6

<PAGE>




                               Network Six, Inc.
                         Notes to Financial Statements
                                March 31, 1998
                                  (unaudited)


(1)     Basis of Presentation

         The interim financial statements have been prepared without audit,
         pursuant to the rules and regulations of the Securities and Exchange
         Commission (SEC). Certain information and footnote disclosures,
         normally included in financial statements prepared in accordance with
         generally accepted accounting principles, have been condensed or
         omitted pursuant to SEC rules and regulations; nevertheless, management
         believes that the disclosures herein are adequate to make the
         information presented not misleading. These financial statements should
         be read in conjunction with the financial statements and notes thereto
         included in the Form 10K and Proxy Statement. In the opinion of
         management, all adjustments, consisting only of normal recurring
         adjustments, necessary to present fairly the financial position of the
         Company as of March 31, 1998, and the statements of income and cash
         flows for the three month periods ended March 31, 1998 and 1997, have
         been included herein. The results of operations for the interim periods
         are not necessarily indicative of the results for the full years.

(2)      The 1997 earnings per share figures were reclassified to comply with
         the Company's December 1997 adoption of SFAS No. 128. Under the new
         requirements for calculating basic earnings per share, the dilutive
         effect of stock options and warrants are excluded.


                                       7

<PAGE>


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

Cautionary Statement Regarding Forward-Looking Statements

          This report contains forward-looking statements reflecting the 
Company's expectations or beliefs concerning future events that could 
materially affect Company performance in the future. All forward-looking 
statements are subject to the risks and uncertainties inherent with 
predictions and forecasts. They are necessarily speculative statements, and 
unforeseen factors, such as competitive pressures, litigation results and 
regulatory and state funding changes could cause results to differ materially 
from any that may be expected. In particular, adverse decisions in on-going 
material litigation could have a material adverse effect on the Company's 
financial condition and operating results. Actual results and events may 
therefore differ significantly from those discussed in forward-looking 
statements. Moreover, forward-looking statements are made in the context of 
information available as of the date stated, and the Company undertakes no 
obligation to update or revise such statements to reflect new circumstances 
or unanticipated events as they occur.

GENERAL

          In January 1998 the Company announced a new $1.5 million line of
credit (See "Liquidity and Capital Resources") and the change of its independent
auditors from KPMG Peat Marwick LLP to Sansiveri, Kimball & McNamee L.L.P. The
Company also announced an extension of the child support enforcement contract
with the U.S. Virgin Islands and a contract to assist MIM Corporation with the
application development of a pharmaceutical benefits management system.

          Effective February 23, 1998, the Nasdaq Stock Market, Inc. ("Nasdaq")
announced new listing requirements for continued inclusion on the Nasdaq
National Market. Nasdaq has provided notice to the Company that the Company does
not meet the new continued listing requirements with respect to the Company's
net tangible assets and the market value of the Company's listed Common Stock.
The Company submitted a plan to Nasdaq to achieve compliance with the new
listing requirements and is awaiting their response. In any event, there can be
no assurance that the Company will be able to stay in compliance with the new
Nasdaq requirements and the inability of the Company to satisfy such
requirements could adversely affect the value of the Company's stock and/or
liquidity. The Company, if de-listed from The Nasdaq National Market, has the to
option seek inclusion of its securities on The Nasdaq SmallCap Market.

          The Company received comments on January 30, 1998 from the Securities
and Exchange Commission regarding the timing of revenue recognition with regard
to the Company's contract with the State of Hawaii during 1996 and whether an
allowance should be taken by the Company against the contract receivable
relating to that contract ($3,459,382 at March 31, 1998). The Company believes
that, although the outcome of the Company's litigation with the State of Hawaii
is uncertain, that it is likely to prevail in the Hawaii litigation and
therefore the Company is not required to take an allowance against that
receivable.

          In April 1998, the Company announced the extension of its contract
with the State of Rhode Island, Department of Human Services to support the
InRHODES system. The contract has been extended through June 30, 1999. The
contract extension is valued at approximately $2.8 million. InRHODES is a
comprehensive computer system that integrates data and functions for the Family
Independence Program, Food Stamps, Child Support Enforcement, Medicaid
Eligibility and General Public Assistance programs.

                                       8

<PAGE>


          In May 1998 the Company announced a three month support contract 
with the State of Maine, Department of Human Services, for the child welfare 
system known as MACWIS that the Company recently developed and implemented. 
The contract value is $700,000.

          The Company has conducted a comprehensive review of its internal
computer systems to identify the systems that could be affected by the "Year
2000" issue and is developing an implementation plan to resolve the issue. The
Year 2000 problem is the result of computer programs being written using two
digits rather than four to define the applicable year. Any of the Company's
programs that have time-sensitive software may recognize a date using "00" as
the year 1900 rather that the year 2000. This could result in a major system
failure or miscalculations. The Company presently believes that, with
modifications to existing software and converting to new software, the Year 2000
problem will not pose significant operational problems for the Company's
computer systems as so modified and converted. However, if such modifications
and conversions are not completed timely, the Year 2000 may have a material
impact on the operations of the Company.

RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO 1997

         Contract revenue increased $807,433 or 57% from $1,414,185 in the 
three months ended March 31, 1997 to $2,221,618 in the three months ended 
March 31, 1998 primarily due to work performed on the Maine Automated Child 
Welfare Information System (MACWIS), increased work on the Rhode Island 
Department of Human Services contract due to welfare reform and revenues from 
the Company's Network Services Division. This increase was offset by the 
completion of the Idaho Child Support Enforcement project effective January 
1998.

         Cost of revenue earned, consisting of direct employee labor, direct 
contract expense and subcontracting expense, increased $473,516 or 49% from 
$973,140 in the three months ended March 31, 1997 to $1,446,656 in the three 
months ended March 31, 1998 due to the increased effort required to support 
the greater level of business.

         Gross profit increased $333,917 or 76% from $441,045 for the three 
months ended March 31, 1997 to $774,962 for the three months ended March 31, 
1998. Gross profit as a percentage of revenue earned increased from 31.2% for 
the three months ended March 31, 1997 to 34.9% for the three months ended 
March 31, 1998. The increase in gross profit percentage is due to higher 
margins on new projects and an increased utilization of the Company's 
existing staff.

         Selling, general and administrative (SG&A) expenses increased 
$31,493 or 6.0% from $526,331 in the three months ended March 31, 1997 to 
$557,824 in the three months ended March 31, 1998 primarily due to an 
increase in marketing and related expenses. On a percentage of contract 
revenue basis, SG&A expenses decreased to 25.1% from 37.2%, as a consequence 
of the Company's reduced level of expenses and increased revenues.

         Interest expense decreased $21,471 to $29,187, or 42.4%, from $50,658
due to a lower level of borrowing and a lower effective interest rate.

         As a result, income before income taxes increased $370,262 from a loss
of $132,187 for the three months ended March 31, 1997 to a profit of $238,075
for the three months ended March 31, 1998.

         Net income increased $272,652 from a loss of $132,187 for the three 
months ended March 31, 1997 to a profit of $140,465 for the three months 
ended March 31, 1998. Preferred dividends declared and accumulated increased 
from $46,233 to $83,219, or 79.9% as a result of the increase in dividend 
rate effective October 1, 1997 from 7.5% to prime plus 5% (13.5% at March 31, 
1998).

LIQUIDITY AND CAPITAL RESOURCES


                                       9
<PAGE>


         In order to finance bid preparation costs and to obtain sufficient
collateral to support performance bonds required by some customers, the Company
has, in the past, entered into joint ventures with other firms with greater
financial resources when bidding for contracts. The Company expects to continue
and expand this practice prospectively as well as to pursue more time and
material contracts than it has historically pursued. Time and materials
contracts generally do not require performance bonds and almost always involve
less risk to deliver what the customer requires.

         The Company has historically not received its first contract progress
payments until approximately three to six months after contract award, which
itself was as much as 12 months after proposal preparation commences. The
Company was therefore required to fund substantial costs well before the receipt
of related income, including marketing and proposal costs and the cost of a
performance bond. Prospectively, the Company expects to continue to tighten up
this timetable, thereby reducing the requirement for additional working capital.

         The Company has funded its operations through cash flows from
operations, bank borrowings, borrowings from venture partners, and private
placements of equity securities. Net cash provided by operating activities was
$351,623 and $488,018 in the three months ended March 31, 1998 and 1997,
respectively. Fluctuations in net cash provided by operating activities are
primarily the result of changes in net income, accounts receivable and income
tax receivable, accounts payable and costs and estimated earnings in excess of
billings on contracts due to differences in contract milestones and payment
dates.

         On April 30, 1997 the Company signed a term loan (the "Loan") with its
bank which required the Company to reduce its outstanding borrowings under the
Loan from $1.8 million to the following limits: October 15, 1997 - $1,500,000,
November 15, 1997 - $1,200,000 and December 15, 1997 - $900,000. The interest
rate on the Loan was 16%, with the difference between 16% and prime plus 2%
payable at maturity, which was January 31, 1998. There were also a number of
provisions for accelerated payment to reduce the Loan balance, such as paying
the bank 50% of any contract holdbacks or income tax refunds. In addition, the
Company agreed to provide the bank with a warrant to purchase 50,487
unregistered shares of the Company's Common Stock at $1.75 per share,
exercisable immediately with an expiration date of April 30, 2002, and agreed to
provide the bank 15% of any recovery received from its litigation in Hawaii. The
warrant and the bank's right to a percentage of any recovery would terminate if
the Company paid down the Loan completely or raised $1 million of equity capital
prior to maturity. The Company's obligations under the Loan were secured by
substantially all of the assets of the Company. The Loan also provided that the
Company not pay any dividends on its capital stock without the consent of the
bank. On January 26, 1998 the Loan was paid in full. The warrant and the bank's
right to a percentage of any Hawaii recovery were cancelled in connection 
with the payment in full.

          On December 31, 1997 the Company signed a $1.5 million line of credit
with a commercial lender (the "Line of Credit"). Accounts receivable from four
of the Company's contracts secure the new Line of Credit. The Company can borrow
up to 80% of the aggregate invoice amounts and is required to repay any
borrowings within 90 days. As of March 31, 1998 the borrowing availability on
the line of credit was $344,109. The interest rate is prime plus five percent on
balances below $1 million and prime plus one and one half percent on balances
over $1 million. The Line of Credit also carries a six- percent annual service
fee on borrowed balances. At March 31, 1998 the Line of Credit had an
outstanding balance of zero.

         The Company believes that cash flow generated by operations will be
sufficient to fund continuing operations through the end of 1998. This assumes,
however, that there are no materially adverse decisions rendered in the ongoing
litigation with Hawaii, MAXIMUS and CBSI. See Part II Item 1 - Legal
Proceedings. The Company is actively seeking new capital to improve its
financial flexibility.


                                       10

<PAGE>


         The Company believes that inflation has not had a material impact on
its results of operations to date.


                           PART 11 - OTHER INFORMATION

Item 1.  Legal Proceedings

         In June 1995, the Company began negotiating a significant amendment to
its contract for a child support enforcement ("CSE") system with the State of
Hawaii (the State) when it determined that the total estimated cost to complete
the system would be significantly greater than expected. In March 1996, the
Company received final State and federal government approval for this contract
amendment totaling $4.4 million. As a result of numerous in-depth reviews of
this contract amendment, management determined that remaining contract costs
would exceed the contract value by $440,000, and therefore, accrued this loss in
December 1995.

         In June 1996 the Company announced a new subcontract agreement with
Complete Business Solutions, Inc ("CBSI") to expand CBSI's role in the Hawaii
CSE contract. CBSI, at the request of Hawaii, was contracted to lead a detailed
review of the current system under development. Hawaii, in turn, agreed to pay
CBSI $1.2 million from the Company's remaining contract budget when various
milestones were achieved. The Company had a significant role in the detailed
review and had hoped that its results would facilitate the resolution of open
contractual scope issues.

         On September 13, 1996, the State of Hawaii terminated its contract with
the Company, effective September 23, 1996, claiming that the Company had failed
to fulfill its obligations under the contract. In response, the Company also
terminated the contract with the State effective September 23, 1996. The Hawaii
contract, originally estimated to be a $20.7 million contract, was increased to
$25.2 million by the State and the Company in March 1996, and was the Company's
largest contract at the time. Prior to termination, approximately $16.5 million
of costs had been incurred towards completion of the contract, and $11 million
had been billed and substantially paid.

         On November 12, 1996 the State of Hawaii filed a lawsuit in the Circuit
Court of the First Circuit of the State of Hawaii against the Company and Aetna
Casualty and Surety and Federal Insurance Company for damages due to breach of
contract (the "Hawaii litigation"). Aetna Casualty and Surety and Federal
Insurance Company provided the $10.3 million performance bond on the Company's
contract with the State of Hawaii to develop and install the State's child
support enforcement system. The suit alleges the Company failed to meet
contractual deadlines, provided late, incomplete and/or unsuitable deliverables,
materially breached the contract by never completing the design, the application
programming, and the system test and systems implementation. The State is
seeking an unspecified amount for general damages, consequential and special
damages, liquidated damages, attorneys' fees, reimbursement for the cost of the
suit and interest costs that the court deems just and proper.

         The Company vigorously denies the State's allegation and, on January
23, 1997, filed a counter claim against the State alleging that the State has
breached the contract. The Company is seeking $70 million in damages and is
alleging that the State fraudulently induced the Company into designing and
building a system having capabilities and features far beyond the scope of the
Company's contract. The fraudulent inducement was in the form of withholding
payments, improper rejection of work that satisfied the requirements of the
contract and verbal and written abuse of the Company's employees and management.


                                       11

<PAGE>


         In addition, Unisys, a vendor providing equipment under the Company's
Hawaii contract, submitted a $896,000 claim against the $10.3 million
performance bond. In February of 1997, the State released all but $1.1 million
of the performance bond; the remainder is intended to cover amounts payable to
Unisys and other subcontractors. In April of 1997, after a detailed review of
their records and discussions with the Company, Unisys agreed to lower their
claim to $859,602 and Aetna Casualty and Surety paid that claim. Lockheed Martin
IMS (Lockheed), which guaranteed the performance bond, reimbursed Aetna for that
claim. In December 1997, the Company reached an agreement with Lockheed to repay
the $859,602 over a five-year period.

         On December 13, 1996 CBSI filed a lawsuit in the Superior Court of the
State of Rhode Island for $517,503, which the Company had previously accrued,
plus interest, costs and attorney's fees. The Company disputes the $517,503
owned to CBSI and filed a counterclaim against CBSI on January 13, 1997
alleging, among other things, that CBSI failed to complete its duties required
under the subcontract with the Company in a timely manner, improperly engaged in
negotiations with the State of Hawaii to complete the project, hired and
attempted to hire employees of the Company in violation of its subcontract
agreement with the Company and obtained and utilized confidential information
and proprietary intellectual property inappropriately. Also, the Company alleges
that CBSI owes the Company $482,750 as of December 31, 1996 for which the
Company has not established a reserve for uncollectibility.

         On February 3, 1997, the Company filed a third-party complaint ("TPC")
as part of the Hawaii litigation against MAXIMUS Corporation ("MAXIMUS") and
CBSI. MAXIMUS has been the State of Hawaii's contract supervisor and advisor
since the inception of the Hawaii project. The allegations the Company has made
against CBSI in this TPC are substantially similar to the allegations made
against CBSI in the Company's counterclaim to CBSI's December 13, 1996 lawsuit
brought against the Company in Rhode Island. The Company alleged, moreover, that
MAXIMUS is liable to the Company on grounds that: (i) the Company was an
intended third party beneficiary under the contract between the MAXIMUS and
Hawaii; (ii) MAXIMUS tortuously interfered in the contract between the Company
and Hawaii; (iii) MAXIMUS negligently breached duties to the Company and (iv)
MAXIMUS aided and abetted Hawaii in Hawaii's breach of contract.
The Company's TPC seeks $60 million in damages.

         Management believes that the Company's claims against the State,
MAXIMUS and CBSI have substantial merit and will vigorously pursue these claims.
There is substantial uncertainty, however, inherent in all litigation. If the
Company were not to prevail in its suit with the State, such a result could have
a material adverse financial effect on the Company and could jeopardize the
Company's ability to continue with its present listing on The Nasdaq National
Market. Management of the Company and its attorneys are unable to predict with
any certainty the ultimate outcome of this litigation, although it is their
belief that a favorable outcome is likely. At March 31, 1998, the Company had
unbilled work-in-process and related receivables from the State and CBSI of
approximately $3.46 million, which exceeds stockholders' equity of approximately
$3.06 million, for which no allowance for uncollectibility has been recorded.
The Company has not accrued for any potential liability to the State, which may
result from this litigation. In addition, the Company has not accrued for any
legal expense to be incurred in connection with this litigation, which could be
significant.

         Due to the significant uncertainty created by these events, the Company
ceased recognition of revenue on the Hawaii contract in 1996. An adjustment of
$1.8 million was recorded in the fourth quarter to reverse revenue of $1
million, $400 thousand and $400 thousand previously recognized in the first,
second and third quarters, respectively. In addition, 1996 costs incurred
related to the Hawaii contract of $1.96 million were charged to expense in 1996.



                                       12
<PAGE>



Item 2.  Change in Securities

         None

Item 3.  Defaults Upon Senior Securities

         None

Item 4.  Submission of Matters to a Vote of Security Holders

         None.

Item 5.  Other Materially Important Events

         None

Item 6.  Exhibits and Reports

         (a)      None

         (b)      The following reports on Form 8-K have been filed during the
                  quarter for which this report is filed.

         A current report on Form 8-K, dated January 6, 1998 and amended on
         January 22, 1998 was filed by the Company announcing the Company's
         disagreement with the previous auditors and a change of auditors from
         KPMG Peat Marwick LLP ("KPMG") to Sansiveri, Kimball and McNamee L.L.P.
         The amended version includes KPMG's response to the Securities and
         Exchange Commission.

         A current report on Form 8-K, dated February 2, 1998 was filed by the
         Company and included the press release dated January 12, 1998,
         announcing the Company's new line of credit with a commercial lender,
         new contracts and the change of auditors.

         A current report on Form 8-K, dated March 18, 1998 was filed by the
         Company and included the press release dated March 16, 1998, announcing
         the Company's results for the year ended December 31, 1997. A Statement
         of Operations (without notes) for the years ended December 31, 1997,
         1996 and 1995 was also included with the filing.


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<PAGE>


                                   SIGNATURES


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


                                Network Six, Inc.


Date: May 8, 1998                 By:   /s/ Kenneth C. Kirsch
                                      --------------------------
                                        Kenneth C. Kirsch
                                        Chairman, President and
                                        Chief Executive Officer




                                  By:   /s/ Dorothy M. Cipolla
                                       --------------------------
                                        Dorothy M. Cipolla
                                        Chief Financial Officer and Treasurer
                                        (principal financial officer)




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