<PAGE>

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

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC  20549

                                   FORM 10-QSB

(Mark One)

  /X/     Quarterly report under Section 13 or 15(d) of the Securities Exchange
  Act of 1934

  For the quarterly period ended November 30,1997

  / /     Transition report under Section 13 or 15(d) of the Exchange Act

  For the transition period from _________  to __________

Commission File Number 0-11791

                            GREENTREE SOFTWARE, INC.
           (Name of Small Business Issuer as Specified in Its Charter)

          NEW YORK                                   13-2897997
----------------------------------        ------------------------------------
  (State or Other Jurisdiction            (I.R.S. Employer Identification No.)
of Incorporation or Organization)


                             7901 FLYING CLOUD DRIVE
                                    SUITE 150
                             EDEN PRAIRIE, MN  55344
                    ----------------------------------------
                    (Address of Principal Executive Offices)

                                 (612) 941-1500
                                 --------------
                (Issuer's Telephone Number, Including Area Code)


     Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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   / /


     State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.

             Class                           Outstanding at December 31, 1997
---------------------------------            --------------------------------
    COMMON SHARES, PAR VALUE                        3,132,118 SHARES
         $0.01 PER SHARE

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

<PAGE>


                            GREENTREE SOFTWARE, INC.

                                      INDEX



 ITEM                                                                      PAGE
NUMBER                                                                    NUMBER


PART I.      FINANCIAL INFORMATION

   Item 1.   Financial Statements


                Balance Sheets as of November 30, 1997 and May 31, 1997..   3

                Statements of Operations for the three months ended
                November 30, 1997 and 1996 and for the six months ended
                November 30, 1997 and 1996..............................    4


                Statements of Cash Flows for the six months ended
                November 30, 1997 and November 30, 1996.................    5

                Notes to the Financial Statements.......................  6-9

   Item 2.   Management's Discussion and Analysis of Financial
                Condition and Results of Operation...................... 9-11


PART II.     OTHER INFORMATION

   Item 2.   Changes in Securities......................................   12

   Item 6.   Exhibits and Reports on Form 8-K...........................   13

   Signatures   ........................................................   14


                                        2

<PAGE>

PART I. FINANCIAL INFORMATION

  ITEM 1.  FINANCIAL STATEMENTS
         Company for which report is filed:  Greentree Software, Inc. (the
"Company")


                            GREENTREE SOFTWARE, INC.
                                 BALANCE SHEETS

                                                November 30, 1997  May 31, 1997
                                                -----------------  ------------
                                                   (Unaudited)
Assets
Current Assets:
 Cash and cash equivalents                        $      29,196    $    245,649
 Accounts receivable, net                                76,937         164,556
 Prepaid expenses and other current assets                3,791          30,204
                                                  -------------    ------------
Total Current Assets                                    109,924         440,409
                                                  -------------    ------------

Property and equipment                                   52,084          54,554
                                                  -------------    ------------
Other Assets:
 Customer list                                           21,347          29,345
 Capitalized software development costs                 351,145         526,372
 Security deposits                                        9,124           9,124
 Other                                                        0          76,261
                                                  -------------    ------------
Total Other Assets                                      381,616         641,102
                                                  -------------    ------------


Total Assets                                      $     543,624    $  1,136,065
                                                  -------------    ------------
                                                  -------------    ------------

Liabilities and Stockholders' Equity (Deficit)

Current Liabilities:
 Accounts payable                                 $     459,928    $    348,148
 Convertible notes payable                                    0       2,049,566
 Accrued expenses                                       199,133         146,214
 Deferred revenues                                      176,651          77,868
                                                  -------------    ------------
Total Current Liabilities                               835,712       2,621,796
                                                  -------------    ------------


Commitments and Contingencies

Stockholders' Equity (deficit):
Common stock, $0.01 par value, authorized
15,000,000 shares issued and outstanding,
2,966,644 and 1,610,610 shares, respectively             29,666          16,106
Additional paid-in capital                           15,452,308      13,231,268
Accumulated deficit                                 (15,685,030)    (14,644,073)
                                                  -------------    ------------
                                                       (203,056)     (1,396,699)
Less treasury stock (4,780 shares) at cost              (89,032)        (89,032)
                                                  -------------    ------------

Total Stockholders' Equity (deficit)                   (292,088)     (1,485,731)
                                                  -------------    ------------
Total Liabilities and Stockholders'
 Equity (Deficit)                                 $     543,624    $  1,136,065
                                                  -------------    ------------
                                                  -------------    ------------

                 See accompanying notes to financial statements


                                        3

<PAGE>

                            GREENTREE SOFTWARE, INC.
                             STATEMENT OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>

                                             FOR THE THREE MONTHS ENDED         FOR THE SIX MONTHS ENDED
                                             --------------------------         ------------------------
                                             November 30,   November 30,       November 30,   November 30,
                                                1997            1996              1997            1996
                                                ----            ----              ----            ----
<S>                                      <C>              <C>                 <C>             <C>
Net Revenues:
 Product                                 $       8,350    $     (1,300)       $    97,125     $    75,825
 Services                                       55,359          55,970             91,627          94,915
                                         -------------    ------------        -----------     -----------
Total Net Revenues                              63,709          54,670            188,752         170,740
                                         -------------    ------------        -----------     -----------

Costs and Expenses:
 Cost of revenues                              130,200         160,266            257,406         269,057
 Selling expenses                              119,286         164,083            273,572         233,470
 General and administrative                    309,010         374,885            692,155         540,118
                                         -------------    ------------        -----------     -----------
Total Costs and Expenses                       558,496         699,234          1,223,133       1,042,645
                                         -------------    ------------        -----------     -----------

Operating Loss                                (494,787)       (644,564)        (1,034,381)       (871,905)

Interest Expense, net                           (2,166)              0             (6,576)              0
                                         -------------    ------------        -----------     -----------

Loss Before Income Taxes                      (496,953)       (644,564)        (1,040,957)       (871,905)

Income Taxes                                         0               0                  0               0
                                         -------------    ------------        -----------     -----------

Net Loss                                     $(496,953)      $(644,564)       $(1,040,957)     $ (871,905)
                                             ---------       ---------        -----------     -----------
                                             ---------       ---------        -----------     -----------


Net loss per common share (Basic)             $ (0.18)        $ (0.41)           $ (0.44)        $ (0.55)
                                              --------        --------           --------        --------
                                              --------        --------           --------        --------


Weighted average shares outstanding          2,732,300       1,583,943          2,382,171       1,583,943
                                             ---------       ---------          ---------       ---------
                                            ----------       ---------          ---------       ---------

</TABLE>


                 See accompanying notes to financial statements


                                        4

<PAGE>

                            GREENTREE SOFTWARE, INC.
                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


                                                       FOR THE SIX MONTHS ENDED
                                                       ------------------------
                                                      November 30,  November 30,
                                                         1997          1996
                                                         ----          ----

Cash Flow From Operating Activities:
  Net loss                                            $(1,040,957)    $(871,905)
  Adjustments to reconcile net loss to net cash
  provided by (used in) operating activities:
    Depreciation and amortization                          18,408        29,096
    Amortization of deferred software costs               250,589       221,937
    Decrease (increase) in accounts receivable             87,619        54,670
    Decrease (increase) in inventories                         --          (904)
    Decrease (increase) in prepaid expenses                26,413       (17,786)
    Decrease in other assets                                4,753        13,586
    Increase in accounts payable                          111,780       (68,542)
    Increase (decrease) in accrued expenses                65,086       (79,845)
    Increase (decrease) in deferred revenue                98,783       (38,436)
                                                      -----------   -----------
Cash Used in Operating Activities                        (377,526)     (758,129)
                                                      -----------   -----------

Cash Flow From Investing Activities:
  Additions to property and equipment                      (7,940)       (9,920)
  Additions to capitalized software
    Development costs                                     (75,362)     (129,484)
                                                      -----------   -----------
Cash (Used) in Investing Activities                       (83,302)     (139,404)
                                                      -----------   -----------


Cash Flow From Financing Activities:
  Net proceeds from private placement                     274,375       706,912
  Payment on note payable                                 (30,000)           --
                                                      -----------   -----------
Cash Provided by Financing Activities                     244,375       706,912
                                                      -----------   -----------

(Decrease) in Cash                                       (216,453)     (190,621)
Cash balance - beginning                                  245,649       249,525
                                                      -----------   -----------

Cash balance - ending                                 $    29,196   $    58,904
                                                      -----------   -----------
                                                      -----------   -----------

Supplemental disclosure of cash
flow information:
  Cash paid for interest                              $     4,797   $        --
  Cash paid for income taxes                          $        --   $        --
                                                      -----------   -----------
                                                      -----------   -----------



                 See accompanying notes to financial statements


                                        5

<PAGE>


                            GREENTREE SOFTWARE, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                NOVEMBER 30, 1997


     NOTE 1.  GENERAL INFORMATION:

     The Financial Statements included herein have been prepared by the Company
without audit except the May 31, 1997 balance sheet, which was audited.  The
Statements have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission and reflect all adjustments, consisting of
only normal recurring accruals which are, in the opinion of management,
necessary for a fair statement of the results of operations for the periods
shown.  These statements do not include all information required by Generally
Accepted Accounting Principles to be included in a full set of Financial
Statements.  These Financial Statements should be read in conjunction with the
Financial Statements and notes thereto included in the Company's latest report
on Form 10-KSB, dated May 31, 1997.


     The accompanying financial statements of the Company have been presented on
the basis that the Company is a going concern, which contemplates the
realization of assets and the satisfaction of liabilities in the normal course
of business.  The Company reported a net loss of $1,040,957 for the six month
period ended November 30, 1997, and $1,823,200 for the year ended May 31, 1997.
Additionally, at November 30, 1997, the Company had a working capital deficit of
$725,788 and a stockholders' deficit of $292,088.

     The Company's continued existence is dependent upon its ability to raise
capital and subsequently market its Windows-based purchasing applications--GT
Purchase PRO. Historically, the Company has been successful in raising funds
from outside sources through private placement or other means.  While the
Company believes that its most recent version of GT Purchase PRO has demand in
the marketplace, the Company, however, provides no assurances that significant
revenues will be generated.  The above matters raise substantial doubt about the
Company's ability to continue as a going concern.

     The Company is considered a Small Business (SB) filer pursuant to
Securities and Exchange Commission (SEC) regulations.  As such, the accompanying
financial statements, are not intended to, nor do they, include all disclosures
required by the SEC's Regulation S-X.


                                        6

<PAGE>

     NOTE 2.   SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES:

     (a)  Accounting Estimates

     Management is required to make estimates and assumptions during the
preparation of financial statements in conformity with Generally Accepted
Accounting Principles.  These estimates and assumptions affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements.  They also affect the
reported amounts of net income (loss) during the period.  Actual results could
differ materially from these estimates and assumptions.

     (b)  Revenue Recognition

     The Company generally recognizes product revenue at the time products 
are delivered, provided that no significant Company obligation remains 
outstanding and collection of the resulting receivable is deemed probable by 
management. Insignificant obligations remaining at the time of shipment are 
accrued.  For those shipments, where a license agreement does not exist and 
the probability of collection and the existence of remaining obligations 
could not be determined, the sale has not been recorded and revenue has not 
been recognized.

     Service revenues are comprised primarily of revenues derived from
maintenance agreements.  Maintenance fees are recorded as deferred revenue and
recognized over the maintenance period which is usually 12 months.  Also
included in deferred revenue are deferred product revenues which, based on their
terms, will be recognized as revenue when the various terms are met.

     (c)  Accounts Receivable

     Accounts receivable is presented net of allowance for uncollectible
accounts of $38,355 at November 30, 1997, and $57,100 at May 31, 1997.

     (d)  Software Development Costs

     The Company is engaged in research and development activities in the area
of computer software.  In accordance with Generally Accepted Accounting
Principles, costs incurred prior to determination of technological feasibility
are considered research and development and treated as a period cost and,
accordingly, charged to operations.  Once technological feasibility has been
established, development costs are capitalized and amortized over the shorter of
an economic life of one to three years or the proportion of current period
product revenues to total expected product revenues.

     (e)  Property and Equipment

     Property and equipment are stated at cost, less accumulated depreciation.
Depreciation is charged to operations over the estimated lives of the related
assets, generally five to seven years, using the straight-line method.
Maintenance and repairs are charged to expense as incurred.  Improvements and
betterments that extend the useful life of the assets are capitalized.
Depreciation was approximately $10,400 and $29,100 for the six months ended
November 30, 1997 and 1996, respectively.


                                        7

<PAGE>


     (f)  Customer List

     During the year ended May 31, 1994, the Company acquired the customer list
of one of its resellers for $80,000.  This reseller subsequently became employed
as the president of the Company.  These costs are being amortized using the
straight-line method over five years.  Amortization expense related to this
intangible asset was approximately $8,000 for both the six months ended November
30, 1997 and 1996.

     (g)  Cash and Cash Equivalents

     The Company considers all highly liquid investments with original
maturities of 90 days or less to be cash equivalents for financial statement
purposes.  Included in cash equivalents at May 31, 1997, was a money market
account totaling approximately $200,000.

     (h)  Income Taxes

     The Company accounts for income taxes in accordance with the provisions of
the Financial Accounting Standards Board Statement of Financial Accounting
Standard No. 109 (SFAS 109), Accounting for Income Taxes.  SFAS 109 requires
that deferred income taxes reflect the tax consequences on future years of
differences between the tax bases of assets and liabilities and their financial
reporting amounts.

     (i)  Loss Per Common Share

     Net loss per common share is computed by dividing net loss by the weighted
average number of shares outstanding during the year.  For the six month period
ended November 30, 1997,and 1996, common stock options and warrants were anti-
dilutive and were not included in the weighted average of common shares used in
determining per share amounts.

     (j)  Recently Issued Accounting Standards

     In March 1997, the Financial Accounting Standards Board issued Statement
No. 128, "Earnings Per Share" (SFAS No. 128).  SFAS No. 128 applies to entities
with publicly held common stock or potential common stock and is effective for
financial statements issued for periods ending after December 15, 1997.  Under
SFAS No. 128 the presentation of primary earnings per share is replaced with a
presentation of basic earnings per share.

SFAS No. 128 requires dual presentation of basic and diluted earnings per share
for entities with complex capital structures.  Basic earnings per share includes
no dilution and is computed by dividing net income (loss) available to common
stockholders by the weighted average number of common shares outstanding for the
period.  Diluted earnings per share reflects the potential dilution of
securities that could share in the earnings of an entity, similar to fully
diluted earnings per share. Management believes the adoption of SFAS No. 128
will not have a material effect on the financial statements.


                                        8

<PAGE>

     (k)  Reclassification and Stock Split

     Certain prior year balances have been reclassified to conform with current
year presentation.  There was no impact on the prior year's net loss or total
stockholders' equity from the reclassification.

     The Company effected a one-for-six reverse stock split effective July 22,
1997.  All shares and per share amounts contained in the financial statements
and notes thereto reflect the retroactive application of such reverse stock
split for all periods presented.

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

     Except for the historical information contained herein, this Quarterly
Report on Form 10-QSB may contain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, including but not limited to the potential for future
orders and the existence of expressions of interest in the GT Purchase PRO
product. Investors are cautioned that forward-looking statements are inherently
uncertain.  Actual performance and results of operations may differ materially
from those projected or suggested in the forward-looking statements due to
certain risks and uncertainties, including but not limited to, the following
risks and uncertainties:  (i) the Company's history of losses and accumulated
deficit, inconsistent revenues and the uncertainty of future profitability; (ii)
the Company's capital requirements and the uncertainty of additional funding;
(iii) the uncertainty of market acceptance of GT Purchase PRO software; (iv) new
management and the need to recruit sales, service and implementation personnel;
(v) the intense competition in the software field; and (vi) the dependence on
one product and rapid technological change in the industry.  Additional
information concerning certain risks and uncertainties that would cause actual
results to differ materially from those projected or suggested in the forward-
looking statements is contained in the Company's filings with the Commission,
including those risks and uncertainties discussed under the caption "Risk
Factors" in the Company's Annual Report on Form 10-KSB for the year ended May
31, 1997.  The forward-looking statements contained herein represent the
Company's judgment as of the date of this Quarterly Report on Form 10-QSB, and
the Company cautions readers not to place undue reliance on such statements.


                                        9

<PAGE>

RESULTS OF OPERATIONS

FOR THE THREE AND SIX MONTHS ENDED NOVEMBER 30, 1997 AND 1996

     Total revenues for the three months ended November 30, 1997 were $63,709
compared to revenue of $54,670 for the three months ended November 30, 1996.
Product revenues for the three months ended November 30, 1997, were $8,350
compared to revenues of $(1,300) for the three months ended November 30, 1996.
Certain product sales from prior periods were reversed during the three months
ended November 30, 1996, resulting in a reported negative product sales figure.
Service revenues were $55,359 for the three months ended November 30, 1997,
compared to $55,970 for the three months ended November 30, 1996.

     Total revenues for the six months ended November 30, 1997 were $188,752
compared to revenue of $170,740 for the six months ended November 30, 1996.
Product revenues for the six months ended November 30, 1997, were $97,125
compared to revenues of $75,825 for the six months ended November 30, 1996.
Service revenues were $91,627 for the six months ended November 30, 1997,
compared to $94,915 for the six months ended November 30, 1996.

     The cost of revenues for the three months ended November 30, 1997 was
$130,200 compared to $160,266 for the three months ended November 30, 1996, a
decrease of $30,066 or 18.8%. This decrease resulted from lower software
amortization costs for the quarter.

     The cost of revenues for the six months ended November 30, 1997 was
$257,406 compared to $269,057 for the six months ended November 30, 1996.

     Selling expense for the three months ended November 30, 1997 was 
$119,286 compared to $164,083 for the three months ended November 30, 1996, a 
decrease of $44,797 or 27.3%. This decrease was the result of lower travel 
expenses, outside consulting fees and lower trade show and promotion costs 
which were offset in part by higher personnel costs.

     Selling expense for the six months ended November 30, 1997 was $273,572
compared to $233,470 for the six months ended November 30, 1996, an increase of
$40,102 or 17.2%. This increase was primarily due to increased personnel and
marketing expenses as sales and marketing activity increased in the six month
period ended November 30, 1997 compared to the prior year.

     General and administrative expense for the three months ended November 30,
1997 was $309,010 compared to $374,885 for the three months ended November 30,
1996, a decrease of $65,875 or 17.6%.  This decrease was primarily due to lower
professional, legal and accounting fees

     General and administrative expense for the six months ended November 30,
1997 was $692,155 compared to $540,118 for the six months ended November 30,
1996, an increase of $152,037 or 28.1%.  This increase was primarily due to
increased compensation expense due to increased staffing for administrative
management.



                                       10

<PAGE>

     For the three months ended November 30, 1997, the Company reported a net
loss of $496,953 (or $.18 per share) as compared to a net loss of $644,564 (or
$.41 per share) for the prior year.  This loss was caused by the continuation of
low revenues which were not sufficient to cover operating costs. The loss for 
the three months ended November 30, 1997 was lower than the loss for the same 
period ended November 30, 1996 primarily due to lower software amortization 
costs and the lower costs as discussed above in the selling and general and 
administrative areas.

     For the six months ended November 30, 1997, the Company reported a net 
loss of $1,040,957 (or $.44 per share) as compared to a net loss of $871,905 
(or $.55 per share) for the prior year.  This loss was caused by the 
continuation of low revenues which were not sufficient to cover operating 
costs. The loss for the six months ended November 30, 1997 was greater than 
the loss for the same period ended November 30, 1996 primarily due to the 
increase of personnel, development, advertising and marketing expense to 
support future potential revenue growth. The per share loss for the six month 
period ended November 30, 1997 decreased while the total net loss increased, 
due to the increase in the number of issued and outstanding shares.

LIQUIDITY AND CAPITAL RESOURCES

     The Company had a working capital deficit of $725,788 at November 30, 1997
as compared to a deficit of $2,181,387 at May 31, 1997, a decrease in the
working capital deficit of $1,455,599. The primary reason for the decrease was
the conversion of convertible notes payable during the three month period ended
August 31, 1997 and the sale through a private placement during the quarter of
401,841 shares of the Company's Common Shares which raised $274,375.  This was
offset by the loss for the six month period and continued product development
expenditures.  As a result, cash decreased from $245,649 at May 31, 1997, to
$29,196 at November 30, 1997.

     Beginning in October 1997, the Company began a private placement of its 
Common Shares and as of December 31, 1997, had sold 567,315 shares of Common 
Shares and raised $385,389 in gross proceeds.  On December 19, 1997, the 
Company issued a convertible note in the original principal amount of $50,000 
to an accredited investor.  This convertible debt was issued at face value, 
has a ninety day term, is convertible into Common Shares at holder's option 
at the lesser of $.6875 per share or 70% of the average bid price of the 
Common Shares for the five days proceeding the conversion.  If holder does 
not convert, holder will be issued 10,000 Common Shares in lieu of interest.

     The Company currently anticipates that it will require additional and 
ongoing funding to continue operating until such time that the Company is 
able to generate product sales sufficient to offset its working capital 
deficit and ongoing operating expenses. There can be no assurance that the 
Company will be successful in securing outside funding or, if available, upon 
what terms.


                                       11

<PAGE>

PART II.  OTHER INFORMATION

Item 2.   Changes in Securities

     From October 1997 to December 1997, the Company issued 567,316 shares of 
Common Shares in a private placement to accredited investors, at a price per 
share of approximately $.70, and resulting in aggregate gross proceeds to the 
Company of $385,389. The issuance and sale of the Common Shares in this 
offering were made in reliance on Rule 506 of Regulation D promulgated under 
the Securities Act of 1933, as amended, and Section 4(2) of the Securities 
Act.

     On December 19, 1997, the Company issued a convertible note in the 
original principal amount of $50,000 to an accredited investor. This 
convertible note was issued at face value, has a ninety day term, and is 
convertible into Common Shares at the holder's option at the lesser of $.6876 
per share of 70% of the average bid price of the Common Shares for the five 
days preceding the conversion. If the holder elects not to convert the 
convertible note, the Company will issue 10,000 shares of Common Shares in 
lieu of interest. The issuance and sale of the convertible note was made in 
reliance on Section 4(2) of the Securities Act.


                                       12

<PAGE>

Item 6.   Exhibits and Reports on Form 8-K

     (a)  Exhibits

          None

     (b)  Reports on Form 8-K

          None



                                       13

<PAGE>

                                   SIGNATURES

     In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                   GREENTREE SOFTWARE, INC.



Date:  January 14, 1998            By:
                                      --------------------------------------
                                   Name:   Joseph D. Mooney
                                   Title:  Chairman of the Board of Directors
                                           and Chief Executive Officer


                                   By:
                                      --------------------------------------
                                   Name:   Philip D. Wolf
                                   Title:  Treasurer and Chief Financial 
                                           Officer




                                       14