<PAGE>   1

                       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 MARCH 31, 1997      COMMISSION FILE NUMBER         0-26368


                            COMPUTRON SOFTWARE, INC.
             (Exact name of registrant as specified in its charter)

                 DELAWARE                                  13-2966911
      (State or other jurisdiction of      (I.R.S. Employer Identification No.)
      incorporation or organization)


                     301 ROUTE 17 NORTH
                   RUTHERFORD, NEW JERSEY                               07070
          (Address of principal executive offices)                   (Zip Code)

                                 (201) 935-3400
              (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 or 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
                                        -----------           -----------



 Number of shares outstanding of the issuer's common stock as of April 25, 1997


                       CLASS                       NUMBER OF SHARES OUTSTANDING
      Common Stock, par value $0.01 per share               20,810,530
<PAGE>   2
                            COMPUTRON SOFTWARE, INC.


                                      INDEX

<TABLE>
<CAPTION>
                                                                                                PAGE
PART I                  FINANCIAL INFORMATION                                                  NUMBER
                                                                                               ------
<S>                     <C>      <C>                                                           <C>
                        Item 1.  Financial Statements

                                      Consolidated Balance Sheets
                                         December 31, 1996 and March 31, 1997 .............      3

                                      Consolidated Statements of Operations
                                         Three months ended March 31, 1996 and 1997 .......      5

                                      Consolidated Statements of Cash Flows
                                         Three months ended March 31, 1996 and 1997 .......      6

                                      Notes to Consolidated Interim Financial Statements...      7


                        Item 2.  Management's Discussion and Analysis of Financial
                                        Condition and Results of Operations ...............     10


PART II                 OTHER INFORMATION

                        Item 1.  Legal Proceedings ........................................     27


                        Item 6.  Exhibits and Reports on Form 8-K .........................     27


SIGNATURES

                        Signatures .....................................................        28
</TABLE>






                                       2
<PAGE>   3
                            COMPUTRON SOFTWARE, INC.
                          CONSOLIDATED BALANCE SHEETS
                     (In thousands, except per share data)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                          December 31,    March 31,
                                                            1996            1997
                                                            ----            ----
<S>                                                      <C>              <C>
ASSETS
Current Assets:
        Cash and cash equivalents                         $19,730         $21,217
        Short-term investments                              1,073           1,600
        Restricted cash                                     3,081           1,293
        Accounts receivable, less reserves of $5,084
                and $4,768 at December 31, 1996 and
                March 31, 1997, respectively               20,340          15,023
        Prepaid expenses and other current assets           1,988           2,017
                                                          -------         -------
                        Total current assets               46,212          41,150
                                                          -------         -------
Equipment and leasehold improvements, at cost:
        Computer and office equipment                      10,249          10,298
        Furniture and fixtures                              1,436           1,249
        Leasehold improvements                                300             468
                                                          -------         -------
                                                           11,985          12,015

        Less - accumulated depreciation and amortization    7,598           8,109
                                                          -------         -------
                                                            4,387           3,906
                                                          -------         -------


Capitalized software development costs, less
        amortization of $3,095 and $3,252
        in 1996 and 1997, respectively                      2,068           1,911
Goodwill, less amortization of $535 and $708 in
        1996 and 1997, respectively                         2,580           2,163
Other assets                                                1,446           1,250
                                                          -------         -------
                                                          $56,693         $50,380
                                                          =======         =======
</TABLE>





The accompanying notes are an integral part of these consolidated financial
statements


                                       3
<PAGE>   4
                            COMPUTON SOFTWARE, INC.
                          CONSOLIDATED BALANCE SHEETS
                     (In thousands, except per share data)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                   December 31,      March 31,
                                                                       1996            1997
                                                                       ----            ----
<S>                                                                <C>              <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Current portion of long-term debt                                $    506         $    445
  Accounts payable                                                    3,975            2,843
  Accrued expenses                                                   17,420           16,292
  Note payable                                                        1,402               --
  Deferred revenue                                                   18,551           18,687
                                                                   --------         --------
    Total current liabilities                                        41,854           38,267
                                                                   --------         --------
Long-term liabilities:
  Long-term debt, less current portion                                   97               52
                                                                   --------         --------
Contingencies (Note 3)

Stockholders' equity:
  Preferred stock, $.01 par value, authorized 5,000 shares,
    no shares issued and outstanding                                     --               --
  Common stock, $ .01 par value, authorized 50,000
    shares; 20,801 shares issued and outstanding
    at December 31, 1996, and 20,811 shares
    issued and outstanding at March 31, 1997                            208              208
  Additional paid-in capital                                         63,879           63,889
  Accumulated deficit                                               (49,371)         (51,368)
  Cumulative translation  adjustment                                     26             (668)
                                                                   --------         --------
    Total stockholders' equity                                       14,742           12,061
                                                                   --------         --------
                                                                   $ 56,693         $ 50,380
                                                                   ========         ========
</TABLE>







The accompanying notes are an integral part of these consolidated financial
statements.


                                       4
<PAGE>   5
                            COMPUTRON SOFTWARE, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     (In thousands, except per share data)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                         Three months ended
                                                         ------------------
                                                      March 31,        March 31,
                                                        1996             1997
                                                        ----             ----
<S>                                                <C>               <C>
Revenues:
        License fees                                $  2,350         $  5,629
        Services                                       5,319           11,162
                                                    --------         --------
                Total revenues                         7,669           16,791
                                                    --------         --------
Operating expenses:
        Cost of license fees                           1,003              281
        Cost of services                               3,903            6,562
        Sales and marketing                            5,756            4,954
        Research and development                       2,982            2,431
        General and administrative                     2,701            4,821
                                                    --------         --------
                Total operating expenses              16,345           19,049
                                                    --------         --------
Operating loss                                        (8,676)          (2,258)
                                                    --------         --------
Other income                                             605              261
                                                    --------         --------
Loss before income taxes                              (8,071)          (1,997)
Income tax provision                                      --               --
                                                    --------         --------
Net loss                                            $ (8,071)        $ (1,997)
                                                    ========         ========

Net loss per common
        and common equivalent share                 $  (0.39)        $  (0.10)
                                                    ========         ========

Weighted average number of
       common and common equivalent
       shares                                         20,767           20,809
                                                    ========         ========
</TABLE>


The accompanying notes are an integral part of these consolidated financial
statements.





                                       5
<PAGE>   6
                            COMPUTRON SOFTWARE, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                (In thousands, except share and per share data)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                   Three Months Ended    Three Months Ended
                                                                      March 31, 1996      March 31, 1997
                                                                     --------------      --------------
<S>                                                                 <C>                  <C>
Cash flows from operating activities:
Net loss                                                                  $ (8,071)        $ (1,997)
Adjustments to reconcile net loss to net
        cash flows provided by (used in) operating activities -
        Depreciation and amortization                                          561              870
        Provision for doubtful accounts                                        127               --
Changes in current assets and liabilities -
        Restricted cash                                                         --            1,788
        Accounts receivable                                                     51            5,317
        Prepaid expenses and other current assets                             (385)             (29)
        Accounts payable and accrued liabilities                               354           (2,260)
        Deferred revenue                                                     1,635              136
                                                                         ---------         --------
Net cash flows provided by (used in) operating activities                   (5,728)           3,825
                                                                         ---------         --------

Cash flows from investing activities:
        Other assets                                                        (2,677)             196
        Capitalized software development costs                                (387)              --
        Purchase of equipment and leasehold improvements                      (552)            (150)
        Short-term investments                                              (3,484)            (527)
                                                                         ---------         --------
Net cash flows used in investing activities                                 (7,100)            (481)
                                                                         ---------         --------

Cash flows from financing activities:
        Proceeds from exercise of stock options                                 38               10
        Payments of notes payable                                               --           (1,402)
        Payments of long term debt                                            (156)            (106)
        Decrease in other long-term liabilities                               (250)              --
                                                                         ---------         --------
Net cash flows provided by financing activities                               (368)          (1,498)
                                                                         ---------         --------
Foreign currency exchange rate effects                                          14             (359)
                                                                         ---------         --------
Net increase in cash and cash equivalents                                  (13,182)           1,487
Cash and cash equivalents, beginning of period                              45,119           19,730
                                                                         ---------         --------
Cash and cash equivalents, end of period                                 $  31,937         $ 21,217
                                                                         =========         ========

Supplemental disclosures of cash flow information
and noncash financing activities:
        Cash paid during the period for -
                Interest                                                  $     32         $      9
                                                                         =========         ========
                Income taxes                                              $     47         $     86
                                                                         =========         ========
</TABLE>



The accompanying notes are an integral part of these consolidated financial
statements




                                       6
<PAGE>   7
                            COMPUTRON SOFTWARE, INC.
               NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(1)  OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

The Company designs, develops, markets and supports client/server financial,
workflow, plant maintenance and archival data management software solutions to
manage mission-critical applications in large organizations operating across a
broad range of industries worldwide.

Basis of Presentation:

The accompanying unaudited consolidated financial statements include the
accounts of Computron Software, Inc. and its wholly owned foreign subsidiaries
located in Australia, Canada, France, Germany, Hong Kong, Poland, Singapore, and
the United Kingdom, (collectively, the "Company"). These financial statements
have been prepared by the Company in accordance with generally accepted
accounting principles and in the opinion of management, contain all adjustments,
consisting only of those of a normal recurring nature, necessary for a fair
presentation of these financial statements.

These consolidated financial statements should be read in conjunction with the
financial statements and related notes included in the Company's 1996 Annual
Report on Form 10-K filed with the Securities and Exchange Commission.

The results of operations for the three months ended March 31, 1997 are not
necessarily indicative of results to be expected for any future periods.


(a)  REVENUE RECOGNITION

The Company recognizes revenue from non-cancelable software licenses upon
product shipment, provided collection is probable and no significant vendor and
post-contract customer obligations remain at the time of shipment. License fees
for contracts which contain uncertainties regarding collection or contain
significant vendor obligations are deferred and recognized when collection is
deemed probable and/or such obligations have been satisfied. The Company
accounts for insignificant vendor obligations by deferring a portion of the
revenue and recognizing it when the related services are performed. Post
contract support (maintenance) service fees are typically billed separately and
are recognized on a straight line basis over the life of the applicable
agreement. The Company recognizes service revenues from consulting and
implementation services, including training, provided by both its own personnel
and by third parties, upon performance of the services.


                                       7
<PAGE>   8
                            COMPUTRON SOFTWARE, INC.
               NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(b)  CASH AND CASH EQUIVALENTS

Cash equivalents are stated at cost, which approximates market, and consist of
short-term, highly liquid investments with original maturities of less than
three months.

(2) RESTATED FINANCIAL RESULTS

The Company has restated its consolidated financial statements for each of the
four years ended December 31, 1995, and certain unaudited quarters therein, and
for each of the three unaudited quarters ended September 30, 1996. In the
opinion of management, all material adjustments necessary to correct the
financial statements have been recorded.

A summary of the impact of such restatements on the unaudited financial
statements for the three month period ended March 31, 1996 is as follows:

<TABLE>
<CAPTION>


                                            Three months ended
                                             March 31, 1996
                                             --------------
                                    Previously            As
                                     Reported          Restated
                                     --------          --------
<S>                                 <C>               <C>
Total Revenue ................        $ 9,378         $ 7,669

Operating Loss ...............         (7,025)         (8,676)

Net Loss .....................         (6,420)         (8,071)
Net Loss per common and common
  equivalent share ...........           (.31)           (.39)
</TABLE>


(3)  CONTINGENCIES

During 1996, the Company and certain of its current and former officers and
directors were named as defendants in six class action civil suits. The suits
were filed in the United States District Court for the District of New Jersey
and have been consolidated by court order into one suit captioned In re
Computron Software, Inc. Securities Litigation, Master File No. 96-1911 (AJL). A
Third Amended Consolidated Class Action Complaint was filed on April 28, 1997,
on behalf of all purchasers of Computron Common Stock during the period from
August 24, 1995 to January 27, 1997. The complaint asserts claims under Sections
11 and 15 of the Securities Act of 1933, Sections 10 (b) and 20 (a) of the
Securities Exchange Act of 1934, as amended, Rule 10b-5 of the Securities and
Exchange Commission promulgated thereunder, and state law, and seeks unspecified
compensatory damages, attorneys' fees and costs. At a conference on April 30,
1997, the Court set a discovery cut-off date for all non-expert discovery of
November 28, 1997, and for all expert discovery of December 31, 1997. The Court
scheduled trial for February 10, 1998. Additionally, the Court scheduled another
status conference for May 28, 1997. The Company intends to vigorously defend
itself against the suits.


                                       8
<PAGE>   9
Since discovery only recently commenced, the Company is unable to assess the
likelihood of an adverse result in the case. There can be no assurances as to
the outcome of the case. The inability of the Company to resolve the claims that
are the basis for the case or to prevail in any related litigation could result
in the Company being required to pay substantial monetary damages for which the
Company may not be adequately insured, which could have material adverse effect
on the Company's business, financial condition and results of operations. In any
event, the Company's defense of such litigation, even if the outcome is
favorable to the Company, has resulted and will continue to result in
substantial costs to the Company.

Historically, the Company has been involved in other disputes and/or litigation
encountered in its normal course of business. The Company believes that the
ultimate outcome of these proceedings will not have a material adverse effect on
the Company's business, financial condition and results of operations or cash
flows.

                                       9
<PAGE>   10
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS


OVERVIEW

This Report contains statements of a forward-looking nature relating to future
events or the future financial performance of the Company. Investors are
cautioned that such statements are only predictions and that actual events or
results may differ materially. In evaluating such statements, investors should
specifically consider the various factors identified in this Report and in the
Company's 1996 Annual Report on Form 10-K filed with the Securities and Exchange
Commission which could cause actual results to differ materially from those
indicated by such forward-looking statements, including the matters set forth
under the caption "Certain Factors That May Affect Future Results and Financial
Condition and the Market Price of Securities" below.

The Company was founded in 1978 as a developer of custom financial software for
mission-critical applications in large organizations, primarily financial
institutions. In the early 1980's, the Company developed financial software for
legacy platforms and introduced sophisticated enterprise-wide financial
software. Identifying the need for client/server financial software applications
in the late 1980's, the Company commenced the re-architecture of its financial
software and began the development and deployment of new product, specifically a
workflow and document management product. In 1993, the Company introduced
Computron Financials and Computron Workflow, the client/server versions of its
financial and workflow products. Computron COOL was introduced in the latter
half of 1993. Since 1994, the Company has released versions of its products with
the capability to interoperate with popular RDBMS software. During the fourth
quarter of 1995, the Company acquired the rights to its Maintenance and Work
Management Software.

During 1996, the Company acquired the Financial Services Division of Generale de
Service Informatique (GSI) based in Paris, France, and AT&T Istel and Co., GMBH,
in Essen, Germany. These operations primarily provide software services in their
respective countries.

The Company's revenues are derived from license fees and services. Revenues for
services and training are recognized upon performance of the services. The
Company's license agreements generally do not provide a right of return.
Historically, the Company's backlog has not been substantial, since products are
generally shipped as orders are received.

The Company has experienced, and may in the future experience, significant
fluctuations in its quarterly and annual revenues and results of operations. The
Company believes that domestic and international operating results will continue
to fluctuate significantly in the future as a result of a variety of factors,
including the timing of revenue recognition related to significant license
agreements, the lengthy sales cycle for the Company's products, the proportion
of revenues attributable to license fees versus services, the utilization of
third parties to perform services, the amount of revenue generated by resales of
third party software, changes in product mix, demand for the Company's products,
the size and timing of individual license transactions, the introduction of new
products and product enhancements by the Company or its competitors, changes in
customers' budgets, competitive conditions in the industry and general economic
conditions.


                                       10
<PAGE>   11
Following the December 31, 1994 audit, the Company received a management letter
from its independent public accountants that identified material weaknesses in
the Company's internal control environment. During 1995, the Company experienced
significant turnover of its senior financial and accounting personnel which
management believes delayed the implementation of certain improvements and
resulted in material weaknesses in these same areas. The December 31, 1995 audit
resulted in material adjustments to the fourth quarter's revenues and expenses.

Upon completion of the December 31, 1995 audit, the Company again received a
management letter from its independent public accountants that identified
material weaknesses similar to those included in the 1994 management letter. In
addition, the independent public accountants recommended that the Company
implement an internal accounting control plan, approved by the Audit Committee
of the Board of Directors, which addresses these weaknesses and reorganize and
upgrade the contracts administration processes, procedures, controls and
personnel to ensure proper revenue recognition and financial reporting.

Upon completion of the December 31, 1996 audit, the independent public
accountants informed the Company that their management letter will again
communicate material weaknesses similar to those included in the 1994 and 1995
management letters along with various other internal control deficiencies. In
response to the independent public accountant's concerns and as a result of
turnover in its accounting and finance departments, the Company has hired senior
executives with software industry experience, including a Chief Executive
Officer, a Chief Financial Officer, a Vice President of Finance and
Administration, a Corporate Controller and Corporate Counsel. The Company
expects to hire additional professionals during the remainder of 1997 as part of
a plan to strengthen the Company's management and internal controls.

The Company has restated its consolidated financial statements for each of the
four years in the period ended December 31, 1995 and certain unaudited quarters
therein and for each of the three unaudited quarters ended September 30, 1996.
The Company incurred net losses of $2.4 million for 1994, $8.6 million for 1995,
and $31.8 million for 1996, and reported a net loss of $2.0 million for the
quarter ended March 31, 1997. As of March 31, 1997, the Company had an
accumulated deficit of $51.4 million. There can be no assurance that the Company
will be profitable in the future.


                                       11
<PAGE>   12
RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, certain operating
data as a percentage of total revenues:

<TABLE>
<CAPTION>
                                        Three Months Ended
                                             March 31,
                                      --------------------

                                       1996           1997
                                       ----           ----
<S>                                 <C>            <C>
Revenues:
  License fees.................       30.6%          33.5%
  Services ....................       69.4           66.5
                                     -----          -----
     Total revenues ...........      100.0          100.0


Operating expenses:
  Cost of license fees ........       13.1            1.7

  Cost of services ............       50.9           39.1

  Sales and  marketing ........       75.1           29.5

  Research and  development ...       38.9           14.5

  General and administrative ..       35.1           28.7
                                     -----          -----

     Total operating ..........      213.1          113.5
expenses

Operating loss ................     (113.1)         (13.5)

Other income ..................        7.9            1.6
                                     -----          -----

Loss before income taxes ......     (105.2)         (11.9)

Income tax provision ..........         --             --

                                     -----          -----
Net loss ......................     (105.2)%        (11.9)%
                                     =====          =====
</TABLE>



TOTAL REVENUES

Total revenues increased 119% for the three months ended March 31, 1997,
compared to the three months ended March 31, 1996, respectively. The increase
was attributable to an increase in both license fees and services revenue.
Results of operations for the three months ended March 31, 1996 do not include
amounts associated with operations in France and Germany which were acquired
during the second and third quarters of 1996, respectively.

The Company derived approximately $1.8 million and $7.4 million or 23.4% and
44.0% of its total revenues, from customers outside of the United States for the
three months ended March 31, 1996 and 1997, respectively. The Company expects
that such revenues will continue to represent a significant percentage of its
total revenues in the future. Most of the Company's international license fees
and services revenue are denominated in foreign currencies. Decreases in the
value of foreign currencies relative to the US dollar could result in losses
from foreign currency translations. The Company does not currently hedge its
foreign exchange exposure. With respect to the Company's sales that are US
dollar-denominated, decreases in the value of foreign currencies relative to the
US dollar could make the Company's products less price competitive.


                                       12
<PAGE>   13
LICENSE FEES

License fees include revenues from software license agreements entered into
between the Company and its customers with respect to both the Company's
products and third party products resold by the Company. License fees increased
140% for the three months ended March 31, 1997, as compared to the three months
ended March 31, 1996. The increase was attributable to increased demand for
licenses, including revenues of $3.5 million from one customer which represented
20.8% of total revenues during the quarter ended March 31, 1997.

SERVICES REVENUE

Services revenue includes fees from software maintenance agreements, training,
installation and consulting services. Maintenance fees are billed separately and
are recognized ratably over the period of the maintenance agreement. Training,
installation and consulting service revenues are recognized as the services are
performed. Services revenue increased 110% for the three months ended March 31,
1997, as compared to the three months ended March 31, 1996. The increase was
attributable to increased training, consulting and maintenance services which
resulted from a larger installed base of the Company's products and acquired
operations in France and Germany which represented $3.1 million of service
revenues during the quarter ended March 31, 1997.

COST OF LICENSE FEES

Cost of license fees consists primarily of amortization of capitalized software
development costs, amounts paid to third parties with respect to products resold
by the Company in conjunction with licensing of the Company's products and, to a
lesser extent, the costs of product media, duplication, manuals and shipping.
The following table sets forth, for the periods indicated, the relationship of
cost of license fees to license fee revenues:

<TABLE>
<CAPTION>
                                                                           Three Months Ended
                                                                               March 31,
                                                                   -----------------------------------

                                                                        1996                1997
                                                                   ---------------      --------------
<S>                                                                <C>                  <C>
                                                                  (In thousands, except percentage data)
License fees ...............................................           $2,350               $5,629

Cost of license fees .......................................            1,003                  281

Cost of license fees as a percentage of license
 fees ......................................................            42.7%                 5.0%
</TABLE>




                                       13
<PAGE>   14
The dollar cost of license fees decreased substantially during the quarter ended
March 31, 1997 as compared to the corresponding prior year period.
Cost of license fees for the quarter ended March 31, 1996 included amounts
associated with third party software resold to customers and for costs recorded
on contracts, while the associated license revenues were deferred due to
uncertainties with respect to collections.

COST OF SERVICES

Cost of services consists primarily of personnel costs for training,
installation, consulting and customer support. These costs include training
third party service and support organizations for the Company's products. The
following table sets forth, for the periods indicated, the relationship of cost
of services and services revenue:

<TABLE>
<CAPTION>
                                                                              Three Months Ended
                                                                                   March 31,
                                                                                   ---------
                                                                        1996                      1997
                                                                        ----                      ----

                                                                     (In thousands, except percentage data)
<S>                                                                <C>                      <C>
Services revenue ...............................................             $5,319                  $11,162

Cost of services ...............................................              3,903                    6,562

Cost of services as a percentage of services
 revenue .......................................................              73.4%                    58.8%
</TABLE>


For the three months ended March 31, 1997, cost of services as a percentage of
services revenue decreased compared to the three months ended March 31, 1996,
primarily as a result of efficiencies obtained through the outsourcing of
training services and a significant increase in maintenance revenue for which
there are lower associated costs as compared to implementation activities.

SALES AND MARKETING

Sales and marketing expenses consist primarily of salaries and commissions as
well as travel and promotional expenses. The following table sets forth, for the
periods indicated, the relationship of sales and marketing expenses to total
revenues:

<TABLE>
<CAPTION>
                                                                            Three Months Ended
                                                                                March 31,
                                                                                ---------
                                                                           1996              1997
                                                                           ----              ----
                                                                     (In thousands, except percentage data)
<S>                                                                    <C>                <C>
Sales and marketing expenses.......................................     $  5,756          $ 4,954
Percentage increase (decrease) over the comparable period in the
  prior year ......................................................         58.3%           (13.9%)
Sales and marketing expenses as a percentage
 of total revenues ................................................         75.1%            29.5%
</TABLE>



Sales and marketing expenses decreased as a percentage of total revenue for the
three months ended March 31, 1997 as compared to the three months ended March
31, 1996, primarily due to a



                                       14
<PAGE>   15
decrease in personnel of approximately 35% as of March 31, 1997 as compared to
March 31, 1996, sales and marketing programs initiated during the 1996 quarter
which were not repeated in 1997 and a significant increase in revenues during
the 1997 quarter.

RESEARCH AND DEVELOPMENT

Research and development expenses consist primarily of engineering personnel
costs, costs of third party equipment and software for development purposes and
costs of outside consultants hired by the Company to assist its product
development efforts. Research and development expenses are generally charged to
operations as incurred. However, certain software development costs are
capitalized in accordance with Statement of Financial Accounting Standards No.
86. Such capitalized software development costs are generally amortized over
periods not exceeding three years.

Research and development expenses (net of capitalized software development
costs) decreased from $3.0 million in the first quarter of 1996 to $2.4 million
in the first quarter of 1997. The Company capitalized software development costs
of $0.4 million in the first quarter of 1996 and none in the first quarter of
1997. The rate of capitalization of software development costs may fluctuate
depending on the mix and stage of development of the Company's product
development and engineering projects.

GENERAL AND ADMINISTRATIVE

General and administrative expenses consist primarily of administrative,
executive and financial personnel costs, and outside professional fees. General
and administrative expenses represented 28.7% of total revenues for the three
months ended March 31, 1997, compared to 35.1% of total revenues for the three
months ended March 31, 1996. General and administrative expenses increased 78.5%
for the three months ended March 31, 1997, as compared to the three months ended
March 31, 1996, primarily due to increases in payroll and related costs due to
an increase in finance and administrative personnel, increased severance costs,
and professional fees associated with litigation. In addition, general and
administrative expenses for the quarter ended March 31, 1997 include $1.1
million associated with the acquired operations in France and Germany.

QUARTERLY RESULTS

The Company has experienced, and may in the future continue to experience,
significant quarter to quarter fluctuations in results of operations and
revenues. Such fluctuations may result in volatility in the price of the
Company's Common Stock. Quarterly revenues and results of operations may
fluctuate as a result of a variety of factors, including the lengthy sales cycle
for the Company's products, the proportion of revenue attributable to license
fees versus services, the amount of revenue generated by resales of third party
software, changes in product mix, demand for the Company's products, the size
and timing of individual license transactions, the introduction of new products
and product enhancements by the Company or its competitors, changes in customer
budgets, competitive conditions in the industry and general economic conditions.
Further, the license of the Company's products generally involves a significant
commitment of capital, and may be delayed due to time-consuming authorization
procedures within an organization. For these and other reasons, the sales cycles
for the Company's products are typically lengthy and subject to a number of
significant risks over which the Company has little or


                                       15
<PAGE>   16
no control, including customers' budgetary constraints and internal
authorization reviews. The Company has historically operated with relatively
little backlog, since its products are generally shipped as orders are received.
The Company has historically recognized a substantial portion of its revenues in
the last month of a quarter, with these revenues frequently concentrated in the
last week of the quarter. License fees in any quarter are substantially
dependent on orders booked and shipped in the last month and last week of that
quarter. Delays in the timing of recognition of specific revenues may adversely
and disproportionately affect the Company's results of operations because a high
percentage of the Company's operating expenses are relatively fixed, and planned
expenditures are based primarily on sales forecasts and only a small percentage
of the Company's operating expenses vary with its revenues. Accordingly, the
Company believes that period to period comparisons of results of operations are
not necessarily meaningful and should not be relied upon as an indication of
future results of operations. There can be no assurance that the Company will be
profitable in any future quarter.

The Company's business has experienced and is expected to continue to experience
significant seasonality, due in part to customer buying patterns. These
fluctuations are caused primarily by customer budgeting and purchasing pattern,
and by the Company's sales commission policies which compensate sale personnel
on the basis of quarterly and annual performance quotas. The Company believes
this pattern may continue in the future.

Due to the foregoing factors, it is likely that in some future quarter the
Company's operating results will be below the expectations of public market
analysts and investors. Such an event would have a material adverse effect on
the price of the Company's Common Stock.


LIQUIDITY AND CAPITAL RESOURCES

At March 31, 1997, the Company had cash, cash equivalents, restricted cash and
short-term investments of $24.1 million and working capital of $2.9 million. As
of March 31, 1997, the Company maintained a $9.0 million line of credit with a
bank pursuant to an agreement dated July 26, 1996. By terms of the revolving
line of credit, which is fully secured by the pledge of $10 million in
certificates of deposit, the Company is required to comply with quarterly and
annual financial statement reporting requirements. The Company's primary lender
has authorized $5.0 million to be available for letters of credit that mature on
July 31, 1998. At March 31,1997, approximately $8.7 million was available under
the credit line and there were $1.3 million of outstanding letters of credit
under this facility. In March 1997, the Company was advised by the bank that it
was in technical default of the line of credit covenants, and that the line
would not be available for future issuance of standby letters of credit or
advances under the line of credit. The Company has requested that the technical
defaults be waived, that the credit line be permanently reduced, and that the
related pledge agreement be permanently reduced to the extent of any amounts in
excess of amounts required to fully secure outstanding letters of credit.

The Company's operating activities provided (used) cash of ($5.7) million and
$3.8 million for the three months ended March 31, 1996 and 1997, respectively.
Net cash used by operations in the three months ended March 31, 1996 was
comprised primarily of the net loss offset by an increase in deferred revenue.
Net cash provided by operations during the three months ended March 31, 1997 was
comprised of a decreases in accounts receivable and restricted cash, offset by
the net loss and decreases in accounts payable and accrued expenses.


                                       16
<PAGE>   17
The Company's investing activities used cash of $7.1 million and $.5 million for
the three months ended March 31, 1996 and 1997, respectively. The principal uses
have been increases in short-term investments, capitalized software costs and
equipment purchases.

Cash used by financing activities was $.4 million and $1.5 million during the
three months ended March 31, 1996 and 1997, respectively and related mainly to
the repayment of debt.

The Company has no significant capital commitments. The Company's aggregate
minimum operating lease payments for the remainder of 1997 and 1998 are expected
to be approximately $4.4 million. The Company believes that its available cash
and cash equivalents, together with investment income and cash flows from
operations, will be sufficient to meet its cash requirements at least through
1997.

During 1996, the Company and certain of its current and former officers and
directors were named as defendants in six civil suits filed as class actions on
behalf of individuals claiming to have purchased Computron Common Stock during
the time period from August 24, 1995, through January 27, 1997. The suits were
filed in the United States District Court for the District of New Jersey and
have been consolidated by court order into one suit captioned In re Computron
Software, Inc. Securities Litigation, Master File No-96-1911 (AJL). See "Item 1
of Part II. Legal Proceedings".

Since discovery only recently commenced, the Company is unable to assess the
likelihood of an adverse result in the case. There can be no assurances as to
the outcome of the case. The inability of the Company to resolve the claims that
are the basis for the case or to prevail in any related litigation could result
in the Company being required to pay substantial monetary damages for which the
Company may not be adequately insured, which could have a material adverse
effect on the Company's business, financial condition and results of operations.
In any event, the Company's defense of such litigation, even if the outcome is
favorable to the Company, has resulted and will continue to result in
substantial costs to the Company.

CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS AND FINANCIAL CONDITION AND THE
MARKET PRICE OF SECURITIES

The Company's future business, results of operations and financial condition are
also dependent on the Company's ability to successfully develop, manufacture,
market and support its products in order to meet customer demands. Inherent in
this process are a number of factors that the Company must carefully manage in
order to be successful. A discussion of certain of these factors is discussed
below.

HISTORY OF OPERATING AND NET LOSSES

The Company generated a net loss of $8.6 million for 1995, $31.8 million for
1996 and reported a net loss for the first quarter of 1997 of $2.0 million. The
Company also incurred a net loss for each of the five years in the period ended
December 31, 1994. As of March 31, 1997, the Company had an accumulated deficit
of $51.4 million. There can be no assurance that the Company will be profitable
in the future.


                                       17
<PAGE>   18
POTENTIAL FOR SIGNIFICANT FLUCTUATIONS IN QUARTERLY OPERATING RESULTS;
SEASONALITY

The Company has experienced, and may in the future experience, significant
quarter to quarter fluctuations in revenues and results of operations. Such
fluctuations may result in volatility in the price of the Company's Common
Stock. Quarterly revenues and results of operations may fluctuate as a result of
a variety of factors, including the lengthy sales cycle for the Company's
products, the proportion of revenues attributable to license fees versus
services, the utilization of third parties to perform services, the amount of
revenue generated by resales of third party software, changes in product mix,
demand for the Company's products, the size and timing of individual license
transactions, the introduction of new products and product enhancements by the
Company or its competitors, changes in customer budgets, competitive conditions
in the industry and general economic conditions. Further, the license of the
Company's products generally involves a significant commitment of capital and
may be delayed due to time-consuming authorization procedures within an
organization. For these and other reasons, the sales cycles for the Company's
products are typically lengthy and subject to a number of significant risks over
which the Company has little or no control, including customers' budgetary
constraints and internal authorization reviews. The Company has historically
operated with little backlog, since its products are generally shipped as orders
are received. The Company has historically recognized a substantial portion of
its revenues in the last month of a quarter, with these revenues frequently
concentrated in the last week of the quarter. License fees in any quarter are
substantially dependent on orders booked and shipped in the last month and last
week of that quarter. Delays in the timing of recognition of specific revenues
may adversely and disproportionately affect the Company's results of operations
because a high percentage of the Company's operating expenses are relatively
fixed, and planned expenditure such as continued expansion of the Company's
sales force, are based primarily on sales forecasts and only a small percentage
of the Company's operating expenses vary with its revenues. Accordingly, the
Company believes that period to period comparisons of results of operations are
not necessarily meaningful and should not be relied upon as an indication of
future results of operations. There can be no assurance that the Company will be
profitable in any future quarter.

The Company's business has experienced and is expected to continue to experience
significant seasonality, due in part to customer buying patterns. These
fluctuations are caused primarily by customer budgeting and purchasing patters
and by the Company's sales commission policies which compensate sales personnel
on the basis of quarterly and annual performance quotas. The Company believes
this pattern may continue in the future.

Due to the foregoing factors, it is likely that in some future quarter the
Company's operating results will be below the expectations of public market
analysts and investors. Such an event would have a material adverse effect on
the price of the Company's Common Stock.

DELISTING FROM NASDAQ AND MARKET ILLIQUIDITY; NO ASSURANCE OF RELISTING ON
NASDAQ

In January 1997, the Company announced that information had come to the
attention of the Board of Directors that may impact previously issued financial
statements and the Company's independent auditors withdrew their reports on the
Company's previously reported financial statements. The Nasdaq Stock Market
subsequently delisted the Company's Common Stock from quotation on the Nasdaq
National Market System ("Nasdaq"). Trading in the Common Stock of the Company is
now being conducted on the over-the-counter market in the "pink sheets" and on
the NASD's "Electronic Bulletin Board." Consequently, the liquidity of the
Company's Common Stock has been seriously impaired


                                       18
<PAGE>   19
which may result in lower prices for the Company's Common Stock than might
otherwise be obtained and could also result in a larger spread between the bid
and asked prices for the Company's Common Stock.

In addition, since the Common Stock is delisted from trading on Nasdaq and the
trading price of the Common Stock is less than $5.00 per share, trading in the
Common Stock is also subject to the requirements of Rule 15g-9 promulgated under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Under such
rule, broker/dealers who recommend such low-priced securities to persons other
than established customers and accredited investors must satisfy special sale
practice requirements, including a requirement that they make an individualized
written suitability determination for the purchaser and receive the purchaser's
written consent prior to the transaction. The Securities Enforcement Remedies
and Penny Stock Reform Act of 1990 also requires additional disclosure in
connection with any trades involving a stock defined as a penny stock
(generally, according to recent regulations adopted by the Securities and
Exchange Commission, any equity security not traded on an exchange or quoted on
Nasdaq that has a market price of less than $5.00 per share, subject to certain
exceptions), including the delivery, prior to any penny stock transaction, of a
disclosure schedule explaining the penny stock market and the risks associated
therewith. Such requirement could severely limit the liquidity of the Company's
Common Stock.

The Company has restated its previously reported financial statements and the
independent auditors have reissued their reports. The Company has appealed the
Nasdaq Stock Market's decision to delist the Company's stock from Nasdaq and
there is a meeting scheduled for June 1997. There can be no assurance that the
Nasdaq Stock Market will approve the Company's appeal.

LITIGATION

During 1996, the Company and certain of its current and former officers and
directors were named as defendants in six class action civil suits. The suits
were filed in the United States District Court for the District of New Jersey
and have been consolidated by court order into one suit captioned In re
Computron Software, Inc. Securities Litigation, Master File No. 96-1911 (AJL). A
Third Amended Consolidated Class Action Complaint was filed on April 28, 1997,
on behalf of all purchasers of Computron Common Stock during the period from
August 24, 1995 to January 27, 1997. The complaint asserts claims under Sections
11 and 15 of the Securities Act of 1933, Sections 10 (b) and 20 (a) of the
Securities Exchange Act of 1934, as amended, Rule 10b-5 of the Securities and
Exchange Commission promulgated thereunder, and state law, and seeks unspecified
compensatory damages, attorneys' fees and costs. At a conference on April 30,
1997, the Court set a discovery cut-off date for all non-expert discovery of
November 28, 1997, and for all expert discovery of December 31, 1997. The Court
scheduled trial for February 10, 1998. Additionally, the Court scheduled another
status conference for May 28, 1997. The Company intends to vigorously defend
itself against the suits.

Since discovery only recently commenced, the Company is unable to assess the
likelihood of an adverse result in the case. There can be no assurances as to
the outcome of the case. The inability of the Company to resolve the claims that
are the basis for the case or to prevail in any related litigation could result
in the Company being required to pay substantial monetary damages for which the
Company may not be adequately insured, which could have material adverse effect
on the Company's business, financial condition and results of operations. In any
event, the Company's defense of such litigation, even if the outcome is
favorable to the Company, has resulted and will continue to result in
substantial costs to the Company.

                                       19
<PAGE>   20
Historically, the Company has been involved in other disputes and/or litigation
encountered in its normal course of business. The Company believes that the
ultimate outcome of these proceedings will not have a material adverse effect on
the Company's business, financial condition and results of operations or cash
flows.

MANAGEMENT CHANGES

During the past three years the Company has experienced significant growth. This
growth has placed a significant strain on the Company's management,
administrative and operational resources and financial control systems.
Simultaneously, the Company has experienced significant turnover of executive
management. The Company has recently added a number of key officers, including
its President and Chief Executive Officer, Executive Vice President and Chief
Financial Officer and Vice President, Finance and Administration, in February
1997. The Company's future results of operations will depend, in part, on its
ability to strengthen its senior management group, and on the ability of its
officers and key employees to improve its management, administrative,
operational and financial reporting systems and to expand, train, manage and
retain its employee base. The Company's inability to manage these issues
effectively could have a material adverse effect on the quality of the Company's
products, the Company's ability to retain key personnel and the Company's
business and financial condition and results of operations.

REPORTING, OPERATING AND CONTROL ENVIRONMENT

Following the audits of the Company's consolidated financial statements for 1994
and 1995, the Company received management letters from its independent public
accountants, Arthur Andersen LLP, which enumerated material weaknesses in the
Company's financial and accounting processes, controls, reporting systems and
procedures. The Company's independent public accountants highlighted the
Company's need for additional financial and accounting personnel with software
industry experience. In addition, the Company's independent public accountants
noted (i) the need for uniformity in the language of its contracts and
recommended that the Company standardize the terms of its license agreements and
expand its internal contract review and approval procedures , (ii) deficiencies
in the organization of customer and contract files and recommended that the
Company improve and standardize record keeping, (iii) the need for expanded and
formalized accounts receivable collection procedures, (iv) the need for improved
documentation and record keeping relating to consulting service projects, and
(v) the need to develop policies and procedures to accurately identify the date
when technological feasibility of developed software has been attained and to
improve the documentation and record keeping for capitalized software
development costs and to do so on a timely basis. In addition, in the 1995
letter, the Company's independent public accountants recommended that the
Company implement improved internal accounting control procedures approved by
the Audit Committee of the Board of Directors and reorganize and upgrade the
contracts administration processes, procedures and personnel to ensure proper
revenue recognition and financial reporting.

Upon completion of the December 31, 1996 audit, the independent public
accountants informed the Company that their management letter will again
communicate material weaknesses similar to those included in the 1994 and 1995
management letters along with various other internal control deficiencies. 
In response to the independent public accountant's concerns and as a result 
of turnover in its accounting and finance departments, the Company has hired 
senior executives with software industry experience, including a Chief 
Executive Officer, a Chief Financial Officer, a


                                       20
<PAGE>   21
Vice President of Finance and Administration, a Corporate Controller and
Corporate Counsel. The Company expects to hire additional professionals during
the remainder of 1997 as part of a plan to strengthen the Company's management
and internal controls. There can be no assurance that the Company will be
successful in implementing such plan.

INTENSE COMPETITION

The financial applications and business software market is intensely competitive
and rapidly changing. A number of companies offer products similar to the
Company's products and target the same customers as the Company. The Company
believes its ability to compete depends upon many factors within and outside its
control, including the timing and market acceptance of new products and
enhancements developed by the Company and its competitors, product
functionality, performance, price, reliability, customer service and support,
sales and marketing efforts and product distribution. The primary competition
for Computron Financials are the financial applications software offered by
Oracle Corporation, PeopleSoft, Inc. and SAP AG. The principal competitors for
the Company's Computron Workflow and Computron COOL software are Kodak and
FileNet Corporation. The Company has entered into an agreement with Wang
pursuant to which Wang has the right to license Computron COOL software to third
parties under its own private label and modify such software. Most of the
Company's competitors are substantially larger than the Company and have
significantly greater financial, technical and marketing resources and
established, extensive direct and indirect channels of distribution. As a
result, they may be able to respond more quickly to new or emerging technologies
and changes in customer requirements, or to devote greater resources to the
development, promotion and sale of their products than the Company. The
Company's products also compete with products offered by other vendors, and with
proprietary software developed by third-party professional service organizations
and management information systems departments of potential customers. Due to
the relatively low barriers to entry in the software market, the Company expects
additional competition from other established and emerging companies as the
client/server applications software market continues to develop and expand. The
Company also expects that competition will increase as a result of software
industry consolidations. In addition, current and potential competitors have
established or may establish cooperative relationships among themselves or with
third parties to increase the ability of their products to address the needs of
the Company's prospective customers. Accordingly, it is possible that new
competitors or alliances among competitors may emerge and rapidly acquire
significant market share. Increased competition is likely to result in price
reductions, reduced gross margins and loss of market share, any of which would
have a material adverse effect on the Company's business, results of operations
and financial condition. There can be no assurance that the Company will be able
to compete successfully against current or future competitors or that
competitive pressures will not have a material adverse effect on the Company's
business, results of operations and financial condition.


                                       21
<PAGE>   22
DEPENDENCE ON PRINCIPAL PRODUCTS

Substantially all of the Company's revenues are derived from the licensing of
Computron Financials, Computron Workflow, Computron COOL, Maintenance and Work
Management and fees from related services. These products and services are
expected to continue to account for substantially all of the Company's revenues
for the foreseeable future. Accordingly, the Company's future results of
operations will depend, in part, on achieving broader market acceptance of these
products and services, as well as the Company's ability to continue to enhance
these products and services to meet the evolving needs of its customers. A
reduction in demand or increase in competition in the market for financial
applications or business software, or decline in sales of such products and
services, could have a material adverse effect on the Company business, results
of operations and financial condition.

NEW PRODUCTS AND RAPID TECHNOLOGICAL CHANGE; RISK OF PRODUCT DEFECTS,
DEVELOPMENT DELAYS AND LACK OF MARKET ACCEPTANCE

The financial applications and business software market is characterized by
rapid technological change, changes in customer requirements, frequent new
product introductions and enhancements and emerging industry standards. The
introduction of products embodying new technologies and emergence of new
industry standards can render existing products obsolete and unmarketable.
Accordingly, the life cycles of the Company's products are difficult to
estimate. The Company's future success will depend in part upon its ability to
enhance its current products and to develop and introduce new products that
respond to evolving customer requirements and keep pace with technological
development and emerging industry standards, such as new operating systems,
hardware platforms, interfaces and third party applications software. There can
be no assurance that the Company will be successful in developing and marketing
product enhancements or new products that respond to technological change,
changes in customer requirements, or emerging industry standards, that the
Company will not experience difficulties that could delay or prevent the
successful development, introduction and marketing of such products and
enhancements, or that any new products or enhancements that it may introduce
will achieve market acceptance. The inability of the Company for technological
or other reasons, to develop and introduce new products or enhancements in a
timely manner in response to changing customer requirements, technological
change or emerging industry standards, would have a material adverse effect on
the Company's business, results of operations and financial condition.

Software products as complex as those offered by the Company often encounter
development delays and may contain undetected errors or failures when introduced
or when new versions are released. The Company has in the past experienced
delays in the development of software by third parties which software is being
licensed to and implemented by customers who are simultaneously licensing and
implementing the Company's products. Those delays have resulted in delays in the
development and shipment of the Company's products. There can be no assurance
that, despite testing by the Company and by current and potential customers,
errors will not be found in new products or enhancements after commencement of
commercial shipments, or that the Company will not experience development
delays, resulting in loss of or delay in market acceptance of a new product or
enhancement, which could have a material adverse effect on the Company's
business, results of operations and financial condition.

                                       22
<PAGE>   23
DEPENDENCE ON PROPRIETARY RIGHTS; RISKS OF INFRINGEMENT

The Company's success is heavily dependent upon its proprietary technology. The
Company regards its software as proprietary, and relies primarily on a
combination of contract, copyright and trademark law, trade secrets,
confidentiality agreements and contractual provisions to protect its proprietary
rights. The Company has no patents or patent applications pending, and existing
trade secrets and copyright laws afford only limited protection. Despite the
Company's efforts to protect its proprietary rights, unauthorized parties may
attempt to copy aspects of the Company's products or to obtain and use
information that the Company regards as proprietary. Policing unauthorized use
of the Company's products is difficult, and while the Company is unable to
determine the extent to which piracy of its software products exists, software
piracy can be expected to be a persistent problem. The Company makes source code
available to certain of its customers which may increase the likelihood of
misappropriation or other misuse of the Company's software. In addition, the
laws of some foreign countries do not protect the Company's proprietary rights
to the same extent as do the laws of the United States. There can be no
assurance that the steps taken by the Company to protect its proprietary rights
will be adequate or that the Company's competitors will not independently
develop technologies that are substantially equivalent or superior to the
Company's technologies.

Although the Company has certain common law rights in relation to its
trademarks, service marks and product names, it does not have any trademark or
service mark registrations. The Company has two pending applications for
"COMPUTRON." A number of corporations and businesses have trademarks and service
marks which are similar to or identical to "COMPUTRON." Although the Company
believes that its "COMPUTRON" mark and other trademarks and service marks are
distinct, there can be no assurance that the Company will be able to register or
protect its trademarks and service marks.

The Company is not aware that any of its products, trademarks or other
proprietary rights infringe the proprietary rights of third parties. However,
there can be no assurance that third parties will not assert infringement claims
against the Company in the future with respect to current or future products. As
the number of software products in the industry increases and the functionality
of these products further overlap, the Company believes that software developers
may become increasingly subject to infringement claims. Any such claims, with or
without merit, can be time consuming and expensive to defend, cause product
shipment delays or require the Company to enter into royalty or licensing
agreements. Such royalty and license agreements, if required, may not be
available on terms acceptable to the Company, or at all, which could have a
material adverse effect on the Company's business, results of operations and
financial condition.

RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS

The Company derived approximately $9.1 million, $14.2 million, and $21.3 million
or 28.0%, 26.9%, and 39.2% of its total revenues, from customers outside of the
United States in 1994, 1995, and 1996, respectively. The company derived
approximately $1.8 million and $7.4 million or 23.4% and 44.0% of its total
revenues, from customers outside of the United States for the quarters ended
March 31, 1996 and 1997, respectively. The Company expects that such revenues
will continue to represent a significant percentage of its total revenues in the
future. The Company believes that its continued growth and profitability will
require expansion of its sales in international markets. The Company intends to
continue to expand its operations outside of the United States and enter
additional international markets, which will require significant management


                                       23
<PAGE>   24
attention and financial resources. During 1996, the Company acquired the
operations, customers and products of AT&T ISTEL, in Essen, Germany, and the
Financial Software Service Division of Generale de Service Informatique, in
Paris, France. There can be no assurance, however, that the Company will be able
to maintain or increase international market demand for its products and
services. Most of the Company's international license fees and services revenue
are denominated in foreign currencies. Decreases in the value of foreign
currencies relative to the U.S. dollar could result in losses from foreign
currency translations. The Company does not currently hedge its foreign exchange
exposure. With respect to the Company's sales that are U.S. dollar-denominated,
decreases in the value of foreign currencies relative to the U.S. dollar could
make the Company's products less price competitive. Additional risks inherent in
the Company's international business activities generally include unexpected
changes in regulatory requirements, tariffs and other trade barriers, costs of
localizing products for foreign countries, lack of acceptance of localized
products in foreign markets, longer accounts receivable payment cycles,
difficulties in managing international operations, potentially adverse tax
consequences, restrictions on repatriation of earnings and the burdens of
complying with a wide variety of foreign laws. There can be no assurance that
such factors will not have a material adverse effect on the Company's future
international revenues and, consequently, on the Company's business, results of
operations and financial condition.

EXPANSION OF INDIRECT CHANNELS

An integral part of the Company's strategy is to expand indirect marketing
channels using systems integrators and to increase the proportion of the
Company's customers licensed through such indirect channels. The Company is
currently investing, and intends to continue to invest, significant resources to
develop indirect marketing channels. There can be no assurance that the Company
will be able to attract and retain systems integrators that will be able to
market the Company's products effectively and will be qualified to provide
timely and cost-effective customer support and service. The Company's agreements
with such third parties are generally not exclusive and many of those third
parties also market competitive products. In many cases, these agreements may be
terminated by either party at any time without cause. The inability to attract
and retain systems integrators could have a material adverse effect on the
Company's business, results of operations and financial condition.

RELIANCE ON CERTAIN RELATIONSHIPS

The Company relies on relationships with a number of consultants, systems
integrators and software and hardware vendors to enhance its product development
and marketing and sales efforts, to implement the Company's software products
and to support its customers. These relationships, many of which are not the
subject of formal written agreements, provide marketing and sales leads to the
Company's direct sales force, assistance in the Company's product development
process and assistance in the service and implementation of the Company's
products. There can be no assurance that these companies, most of which have
significantly greater financial and marketing resources than the Company, will
not develop or market software products which compete with the Company's
products in the future or will not otherwise discontinue their relationships
with or support of the Company. The failure by the Company to maintain its
existing relationships, or to establish new relationships in the future, because
of a divergence of interests, acquisition of one or more of these third parties
or other reason, could have a material adverse effect on the Company's business,
results of operations and financial condition.


                                       24
<PAGE>   25
The Company also licenses software from third parties which is incorporated into
its products. These licenses expire from time to time. In addition, the Company
generally does not have access to source code for the software supplied by these
third parties. Certain of these third parties are small companies that do not
have extensive financial and technical resources. If any of these relationships
were terminated or if any of these third parties were to cease doing business,
the Company may be forced to expend significant time and development resources
to replace the licensed software. Such an event would have a material adverse
effect upon the Company's business, results of operations and financial
condition.

CONTROL BY EXISTING STOCKHOLDERS

The Company's senior management, directors and affiliates together beneficially
own approximately 65.6 % of the outstanding shares of Common Stock. As a result,
these stockholders are able to exercise control over matters requiring
stockholder approval, including the election of directors, and mergers,
consolidations and sales of all or substantially all of the assets of the
Company. This may prevent or discourage tender offers for the Company's Common
Stock unless the terms are approved by such stockholders.

RELIANCE ON KEY PERSONNEL

The Company's future success will depend to a significant extent upon a number
of key management and technical personnel. The loss of the services of one or
more key employees could have a material adverse effect on the Company's
business. The Company is a party to employment agreements with certain key
personnel. In addition, the Company is the beneficiary of key-person life
insurance on the lives of certain key personnel. The Company believes that its
future success will also depend in large part upon its ability to attract and
retain highly skilled technical, management, sales and marketing personnel.
Competition for such personnel is intense, and the services of qualified
personnel are difficult to obtain and replace. There can be no assurance that
the Company will be successful in attracting and retaining the personnel
necessary to develop, market, service and support its products and conduct its
operations successfully. The inability of the Company to attract, hire,
assimilate and retain such personnel, or to increase revenues at a rate
sufficient to absorb the resulting increased expenses, would have a material
adverse effect on the Company's business, results of operations and financial
condition.

POSSIBLE VOLATILITY OF STOCK PRICE

The trading price of the Company's Common Stock has been, and, in the future
could be subject to significant fluctuations in response to variations in
quarterly operating results, the gain or loss of significant contracts, changes
in earning estimates by analysts, announcements of technological innovations or
new products by the Company or its competitors, general conditions in the
software and computer industries and other events or factors. In addition, the
stock market in general has experienced extreme price and volume fluctuations
which have affected the market price from many companies in industries similar
or related to that of the Company and which have been unrelated to the operating
performance of such companies. These market fluctuations may adversely affect
the market price of the Company's Common Stock.

ANTI-TAKEOVER EFFECT OF CERTAIN CHARTER AND BY-LAW PROVISIONS AND DELAWARE LAW


                                       25
<PAGE>   26
The Company's Fourth Amended and Restated Certificate of Incorporation
authorizes the Board of Directors to issue, without stockholder approval,
5,000,000 shares of Preferred Stock with voting, conversion and other rights and
preferences that could materially and adversely affect the voting power or other
rights of the holders of Common Stock. Although the Company has no current plans
to issue any shares of Preferred Stock, the issuance of Preferred Stock or of
rights to purchase Preferred Stock could be used to discourage an unsolicited
acquisition proposal. In addition, the possible issuance of Preferred Stock
could discourage a proxy contest, make more difficult the acquisition of a
substantial block of the Company's Common Stock or limit the price that
investors might be willing to pay in the future for shares of the Company's
Common Stock. Certain provisions of the Company's by-laws and of Delaware law
applicable to the Company could delay or make more difficult a merger, tender
offer or proxy contest involving the Company.


                                       26
<PAGE>   27
                            COMPUTRON SOFTWARE, INC.

                                     Part II

                                Other Information

ITEM 1.           LEGAL PROCEEDINGS

During 1996, the Company and certain of its current and former officers and
directors were named as defendants in six class action civil suits. The suits
were filed in the United States District Court for the District of New Jersey
and have been consolidated by court order into one suit captioned In re
Computron Software, Inc. Securities Litigation, Master File No. 96-1911 (AJL). A
Third Amended Consolidated Class Action Complaint was filed on April 28, 1997,
on behalf of all purchasers of Computron Common Stock during the period from
August 24, 1995 to January 27, 1997. The complaint asserts claims under Sections
11 and 15 of the Securities Act of 1933, Sections 10 (b) and 20 (a) of the
Securities Exchange Act of 1934, as amended, Rule 10b-5 of the Securities and
Exchange Commission promulgated thereunder, and state law, and seeks unspecified
compensatory damages, attorneys' fees and costs. At a conference on April 30,
1997, the Court set a discovery cut-off date for all non-expert discovery of
November 28, 1997, and for all expert discovery of December 31, 1997. The Court
scheduled trial for February 10, 1998. Additionally, the Court scheduled another
status conference for May 28, 1997. The Company intends to vigorously defend
itself against the suits.

Since discovery only recently commenced, the Company is unable to assess the
likelihood of an adverse result in the case. There can be no assurances as to
the outcome of the case. The inability of the Company to resolve the claims that
are the basis for the case or to prevail in any related litigation could result
in the Company being required to pay substantial monetary damages for which the
Company may not be adequately insured, which could have material adverse effect
on the Company's business, financial condition and results of operations. In any
event, the Company's defense of such litigation, even if the outcome is
favorable to the Company, has resulted and will continue to result in
substantial costs to the Company.

Historically, the Company has been involved in other disputes and/or litigation
encountered in its normal course of business. The Company believes that the
ultimate outcome of these proceedings will not have a material adverse effect on
the Company's business, financial condition and results of operations or cash
flows.

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K

       a)   Exhibits -
            10.15  Severance Agreement between the Company and Joseph Esposito
                   (filed herewith)
            10.16  Employment Agreement between the Company and Michael
                   Jorgensen (filed herewith)
       b)   Reports on Form 8-K -
            None


                                       27
<PAGE>   28
                            COMPUTRON SOFTWARE, INC.


                                    SIGNATURE


         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.




                             COMPUTRON SOFTWARE, INC.


Date:    May 14, 1997        By:    :  /s/    Michael R. Jorgensen
                                    -----------------------------------------
                                    Michael R. Jorgensen
                                    Executive Vice President, Chief Financial
                                    Officer, Treasurer and Secretary ( Principal
                                    Financial and Accounting Officer)








                                       28

<PAGE>   29
                                EXHIBIT INDEX
                                -------------



   Exhibits        Description
   --------        -----------

   10.15         Severance Agreement between the Company and Joseph Esposito
                 (filed herewith)

   10.16         Employment Agreement between the Company and Michael
                 Jorgensen (filed herewith)

   27.1          Financial Data Schedule