SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 1998


[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
        SECURITIES EXCHANGE ACT OF 1934

                         Commission File Number 0-22970


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

          Delaware                                     54-1590649
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)

                 500 Huntmar Park Drive, Herndon, Virginia 20170
                    (Address of principal executive offices)


                                 (703) 478-2260
                           (Issuer's telephone number)


         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 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 [ ]

         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock, as of the latest practicable date: 32,491,048 shares of
common stock, $.0001 par value, as of July 22, 1998.


<PAGE>


                                   TREEV, INC.

                                    Form 10-Q


                                Table of Contents



PART I   FINANCIAL INFORMATION

Item 1.  Financial Statements.

            Consolidated Balance Sheets at June 30, 1998
            (unaudited) and December 31, 1997                              2
    
            Consolidated Statements of Operations (unaudited)
            for the three months ended June 30, 1998 and 1997              3

            Consolidated Statements of Operations (unaudited)
            for the six months ended June 30, 1998 and 1997                4

            Consolidated Statement of Changes in Stockholders' Equity
            (unaudited) for the six months ended June 30, 199              5

            Consolidated Statements of Cash Flows (unaudited)
            for the six months ended June 30, 1998 and 1997                6
    
            Notes to Consolidated 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.                                               17

Item 6.  Exhibits and Reports on Form 8-K.                                19



<PAGE>
                                   TREEV, INC.
                           CONSOLIDATED BALANCE SHEETS
               (In thousands, except share and per share amounts)



                                                         June 30,   December 31,
                                                           1998          1997
                                                         ---------    ---------
                                                        (Unaudited)
                                ASSETS

Current assets:
 Cash and cash equivalents                               $   4,092    $   3,816
 Accounts and notes receivable, net                          7,954        8,569
 Note receivable Dorotech sale                                --          7,000
 Inventories                                                   691          722
 Prepaid expenses and other                                    599        1,108
                                                         ---------    ---------
      Total current assets                                  13,336       21,215
Fixed assets, net                                            1,977        2,165
Long-term notes receivable, net                                138          378
Software development costs and
 purchased technology, net                                   2,484        2,490
Goodwill, net                                                  416          499
Other assets                                                   121          113
                                                         ---------    ---------
        Total assets                                     $  18,472    $  26,860
                                                         =========    =========


                  LIABILITIES & STOCKHOLDERS' EQUITY

Current liabilities:
 Current debt maturities and
  obligations under capital leases                       $     803    $   2,479
 Accounts payable                                            1,736        2,037
 Accrued compensation and related
  expenses                                                   1,199        1,135
 Deferred revenue                                            4,681        3,334
 Other accrued expenses                                      2,901        2,250
                                                         ---------    ---------
        Total current liabilities                           11,320       11,235
Long-term debt and obligations
 under capital leases                                           77        1,108
                                                         ---------    ---------
        Total liabilities                                   11,397       12,343
Commitments
Redeemable Series F preferred
 stock, none and 792,186 shares
 issued and outstanding                                       --          6,548
Stockholders' equity:
 Preferred stock, $.0001 par value,
  20,000,000 shares authorized;
  1,615,575 and 1,615,675 shares
  issued and outstanding
 Common stock, $.0001 par value,
  100,000,000 shares authorized;
  32,044,328 and 26,236,186 shares
  issued and outstanding                                         3            3
 Additional paid-in-capital                                136,442      132,403
 Accumulated deficit                                      (129,370)    (124,437)
                                                         ---------    ---------
        Total stockholders' equity                           7,075        7,969
                                                         ---------    ---------
        Total liabilities and
         stockholders' equity                            $  18,472    $  26,860
                                                         =========    =========




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


                                      -2-
<PAGE>
                                   TREEV, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
               (In thousands, except share and per share amounts)
                                   (Unaudited)


                                                   Three Months Ended June 30,
                                                    1998               1997
                                                ------------       ------------

Revenue:
  Products                                      $      5,085       $      4,098
  Services                                             2,844              5,236
                                                ------------       ------------
                                                       7,929              9,334
                                                ------------       ------------
Costs and expenses:
  Cost of products sold                                1,846              2,198
  Cost of services provided                            1,941              3,934
  Sales and marketing                                  3,103              3,640
  General and administrative                           1,075              1,689
  Product development                                    965              1,266
  Restructuring costs                                  1,505               --
                                                ------------       ------------
                                                      10,435             12,727
                                                ------------       ------------
Loss before interest income
 and income taxes                                     (2,506)            (3,393)
  Interest income (expense), net                           6                (64)
                                                ------------       ------------
Loss before income taxes                              (2,500)            (3,457)
  Income tax provision                                  --                   61
                                                ------------       ------------
Net loss                                              (2,500)            (3,518)
                                                ------------       ------------

Preferred stock preferences                             (337)              (930)
                                                ------------       ------------
Net loss applicable to common
 shares                                         $     (2,837)      $     (4,448)
                                                ============       ============

Net loss per common share                       $      (0.10)      $      (0.18)
                                                ============       ============

Weighted average shares
 outstanding                                      29,330,815         24,963,956
                                                ============       ============

Net loss per common share -
 assuming dilution                              $      (0.10)      $      (0.18)
                                                ============       ============

Weighted average shares
 outstanding                                      29,330,815         24,963,956
                                                ============       ============





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

                                      -3-
<PAGE>
                                   TREEV, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
               (In thousands, except share and per share amounts)
                                   (Unaudited)


                                                    Six Months Ended June 30,
                                                     1998              1997
                                                 ------------      ------------

Revenue:
  Products                                       $      8,636      $      8,366
  Services                                              5,493            10,087
                                                 ------------      ------------
                                                       14,129            18,453
                                                 ------------      ------------
Costs and expenses:
  Cost of products sold                                 3,661             4,156
  Cost of services provided                             3,786             7,816
  Sales and marketing                                   5,837             7,252
  General and administrative                            2,250             3,300
  Product development                                   1,961             2,308
  Restructuring costs                                   1,505              --
  Gain from extinguishment of debt                       --                (267)
                                                 ------------      ------------
                                                       19,000            24,565
                                                 ------------      ------------
Loss before interest income
 and income taxes                                      (4,871)           (6,112)
  Interest expense, net                                   (62)              (33)
                                                 ------------      ------------
Loss before income taxes                               (4,933)           (6,145)
  Income tax provision                                   --                  55
                                                 ------------      ------------
Net loss                                               (4,933)           (6,200)
                                                 ------------      ------------

Preferred stock preferences                              (674)           (1,906)
                                                 ------------      ------------
Net loss applicable to common
 shares                                          $     (5,607)     $     (8,106)
                                                 ============      ============

Net loss per common share                        $      (0.21)     $      (0.33)
                                                 ============      ============

Weighted average shares
 outstanding                                       27,316,368        24,715,116
                                                 ============      ============

Net loss per common share -
 assuming dilution                               $      (0.21)     $      (0.33)
                                                 ============      ============

Weighted average shares
 outstanding                                       27,316,368        24,715,116
                                                 ============      ============








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

                                      -4-
<PAGE>
<TABLE>

                                   TREEV, INC.
            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                     For the six months ended June 30, 1998
                      (In thousands, except share amounts)
                                   (Unaudited)



<CAPTION>
                                                                                          Additional
                                    Preferred Stock              Common Stock              paid-in        Accumulated
                                    Shares       Amt.         Shares         Amt.          capital           Deficit       Total
                                 -----------------------   ---------------------------  ----------------  -------------  ----------
<S>                               <C>        <C>           <C>                <C>         <C>              <C>               <C>

Balance December 31, 1997         1,615,575  $  --         26,236,186         $3          $132,403         ($124,437)        $7,969

Issuance of common stock,
 net of offering costs of $175                              4,016,073                        3,352                            3,352

Issuance of preferred stock,
 net of offering costs of $144        1,000                                                    972                              972

Conversion of preferred stock        (1,000)                1,449,685                                                             0

Issuance of warrants                                                                            52                               52

Dividends on preferred stock                                  342,384                         (337)                            (337)

Net loss                                                                                                      (4,933)        (4,933)
                                 -----------------------   ---------------------------  ----------------  -------------  ----------

Balance June 30, 1998             1,615,575     --         32,044,328         $3           136,442         ($129,370)        $7,075
                                 =======================   ===========================  ================  =============  ==========

</TABLE>






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

                                      -5-
<PAGE>
                       TREEV INCORPORATED AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)


                                                       Six months Ended June 30,
                                                           1998           1997
                                                         -------        -------
                                                             (In thousands)

Cash flows from operating activities:
  Net loss                                               $(4,933)       $(6,200)
  Adjustments to reconcile net loss
   to net cash used in operating
   activities:
   Depreciation and amortization                           1,221          2,550
   Restructuring costs                                     1,505           --
   Other non-cash adjustments                                 40             10
   Changes in assets and liabilities:
    Accounts and notes receivable                            588           (836)
    Inventories                                               31           (182)
    Prepaid expenses and other                               111            190
    Accounts payable                                        (320)           474
    Accrued compensation and
     related expenses                                         64            418
    Accrued expenses, other                                 (438)          (212)
    Deferred revenues                                      1,347            641
    Deferred income taxes                                   --               74
                                                         -------        -------
Net cash used in operating activities                       (784)        (3,073)
                                                         -------        -------

Cash flows from investing activities:
 Capitalized software development
  and license costs                                         (751)          (751)
 Purchases of fixed assets                                  (473)          (410)
 Proceeds from business divestitures,
  net of related costs                                     7,230             60
                                                         -------        -------
Net cash provided by (used in)
 investing activities                                      6,006         (1,101)
                                                         -------        -------

Cash flows from financing activities:
 Proceeds from issuance of common
  stock, net                                               3,423             22
 Proceeds from issuance of preferred
  stock, net                                                --              (24)
 Cash dividends paid on preferred
  stock                                                     --           (1,779)
 Redemption of  Mandatory Redeemable
  Preferred Stock                                         (6,548)        (3,500)
 Redemption of convertible debentures                     (1,300)          --
 Proceeds from borrowings                                   --            5,000
 Principal payments on capital lease
  obligations                                               (521)          (536)
 Principal payments on debt                                 --             (633)
                                                         -------        -------
Net cash used in financing activities                     (4,946)        (1,450)
                                                         -------        -------

Effect of exchange rate changes on cash
 and cash equivalents                                       --             (132)
Net decrease in cash and cash
 equivalents                                                 276         (5,756)
Cash and cash equivalents at beginning
 of year                                                   3,816          7,601
                                                         -------        -------
Cash and cash equivalents at June 30,                    $ 4,092        $ 1,845
                                                         =======        =======

Supplemental Cash Flow Information:
     Interest paid                                       $   156        $   234
     Income taxes paid                                   $   175        $   198



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

                                      -6-
<PAGE>

                                   TREEV, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 1998 and 1997

1.  BASIS OF PRESENTATION

The  unaudited  financial  statements  presented  herein  have been  prepared in
accordance with the  instructions to Form 10-Q and should be read in conjunction
with the financial statements and notes thereto included in the Company's Annual
Report  on Form  10-K  for the  year  ended  December  31,  1997  which  include
information  and  note  disclosures  not  included  herein.  In the  opinion  of
management  all  adjustments,  which  include  only those of a normal  recurring
nature, necessary to fairly present the Company's financial position, results of
operations  and  cash  flows  have  been  made  to  the  accompanying  financial
statements.  The results of  operations  for the six month period ended June 30,
1998 may not be  indicative  of the results  that may be  expected  for the year
ending December 31, 1998.


2.   NAME CHANGE

During the second  quarter of 1998,  the Company  changed its name from  Network
Imaging  Corporation to TREEV, Inc. The name change more accurately reflects the
Company's new orientation as a provider of integrated, production level document
management  solutions and was done in conjunction  with the  introduction of the
Company's new integrated document management software product suite.


3.   RESTRUCTURING CHARGES

During the second quarter of 1998, the Company incurred a charge of $1.5 million
as a result of effecting a  restructuring  plan ("the Plan").  The Plan provided
for the  elimination  of duplicate job  functions  and outdated or  discontinued
products.  Under the Plan, the Company is combining its three separate  customer
support organizations into one support organization, and the Company's strategic
focus will shift to its newest suite of integrated  document management software
using a  Microsoft  based  architecture.  The  restructuring  charge  includes a
$827,000 write down to net realizable  value of prepaid licenses and capitalized
software  which  related to products  abandoned  in favor of the new  integrated
document management  software suite. In addition,  $677,000 of the restructuring
charge related to severance costs for 29 employees located  throughout the U.S.,
including  customer support,  sales,  marketing,  engineering and administrative
personnel.  The Plan is expected to be completed by the end of the first quarter
of 1999. At June 30, 1998, 19 employees had been terminated,  severance benefits
of $267,000 had been paid out and the accrual  balance  relating to the Plan was
$410,000.

                                       -7-
<PAGE>

4.   CONVERSION OF LINE OF CREDIT TO PREFERRED STOCK

In  June  1998,  the  Company  converted  the  remaining  $1.0  million  of  the
Stockholder  line of credit into equity  through the issuance of 1,000 shares of
Series M1 Convertible  Stock  ("Series M1 Stock").  The Company agreed to file a
registration  statement to register the Common Stock issuable upon conversion of
the preferred stock on or about August 1, 1998. The Company received no proceeds
from the conversion of the Stockholder  line of credit to equity.  The Series M1
Stock issued and outstanding in December 2001 automatically converts into Common
Stock.  At June 30, 1998,  the 1,000 shares of Series M1 Stock were  convertible
into 1,230,769 shares of Common Stock.

The  Series M1 Stock  has a per share  liquidation  preference,  subject  to the
liquidation  preference of the Series A Stock,  of an amount equal to the sum of
$1,000 plus 8 1/2% per annum  simple  interest  thereon for the period since the
date of issuance. Each share is convertible at the option of the holder into the
number of shares of Common Stock  determined  by dividing an amount equal to the
initial  purchase  price of  $1,000  by  $0.8125.  The  Series  M1  Stock  has a
cumulative  dividend  rate of 8 1/2% per annum  which is  payable at the time of
conversion or  redemption in cash or shares of Common Stock,  at the election of
the Company.  If the  cumulative  dividend is paid in stock,  the amount paid is
based on 95% of the  closing  bid price on the date of notice of  conversion  or
redemption.

The Series M1 holder has a right of redemption under various circumstances,  all
of which are under the sole control of the  Company.  The Company has the right,
at any time,  to redeem all of the then  outstanding  Series M Stock for a price
per share equal to $1,000 plus the accrued unpaid dividend.


5.   ISSUANCE OF COMMON STOCK

During the first quarter of 1998, the Company  completed a private  placement of
1,108,947  shares of  Common  Stock,  together  with  warrants  to  purchase  an
additional  50,000  shares of Common  Stock,  pursuant to Regulation D under the
Securities  Act of 1933, as amended (the  "Securities  Act").  Proceeds from the
offering  were $1.1 million and  offering  costs were  $26,000.  Pursuant to the
terms of the private placement,  the Company is obligated to file a registration
statement with the Securities and Exchange  Commission to register the shares by
August 31, 1998.

During the second quarter of 1998, the Company  completed a private placement of
2,907,126 shares of Common Stock,  pursuant to Regulation D under the Securities
Act.  Proceeds  from the  offering  were $2.5  million and  offering  costs were
$150,000.  Pursuant  to the  terms of the  private  placement,  the  Company  is
obligated to file a  registration  statement  with the  Securities  and Exchange
Commission to register the shares by August 31, 1998.

                                       -8-
<PAGE>

During the second  quarter of 1998,  the Company issued 342,384 shares of Common
Stock as a quarterly  dividend to the  shareholders  of the  Company's  Series A
Preferred Stock.


6.    EXCHANGE OF NOTE RECEIVABLE FOR EQUITY

During the second  quarter of 1998,  the Company  exchanged a $1.1  million note
receivable,  that  had  been  received  from  the  sale  of a  previously  owned
subsidiary, for equity in the company that acquired the subsidiary.  Previously,
the note had been reserved in its  entirety,  and the Company has made a similar
reserve on the equity received in the exchange.


7.   RETIREMENT OF REDEEMABLE PREFERRED STOCK

During the first quarter of 1998,  the Company  redeemed the  remaining  792,186
shares  of  Series F  Preferred  Stock for $6.5  million  including  outstanding
interest.  The $6.5 million payment  retired the obligations  under the Series F
Stock. The Company used the $7.0 million proceeds  received in January 1998 from
the sale of its subsidiary in France, Dorotech, S.A., to finance the buy back of
the Company's Series F Stock.


8.   CONVERTIBLE NOTE REDEMPTION

During the first quarter of 1998,  the Company  redeemed in cash $1.3 million of
the 8% Convertible  Notes ("the Notes") due July 8, 2002 and August 20, 2002. At
June 30, 1998, $600,000 of the Notes remained outstanding.
















                                       -9-


<PAGE>


                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking Statements and Certain Risk Factors

         This "Management's  Discussion and Analysis of Financial  Condition and
Results of Operations"  section of this  Quarterly  Report on Form 10-Q contains
certain  forward  looking  statements  that are subject to a number of risks and
uncertainties.  In  addition,  the Company may publish or make  forward  looking
statements  from time to time relating to such matters as anticipated  financial
performance,  business  prospects and strategies,  sales and marketing  efforts,
technological  developments,  new products, research and development activities,
and  similar  matters.  The  Private  Securities  Litigation  Reform Act of 1995
provides a safe harbor for forward looking  statements.  In order to comply with
the terms of the safe harbor,  the Company notes that a variety of factors could
cause the Company's  actual results to differ  materially  from the  anticipated
results or other  expectations made in the Company's forward looking  statements
in this  Quarterly  Report or  elsewhere.  The risks  and  uncertainties  of the
Company include those set forth in the Company's Prospectus dated April 6, 1998,
such as the following:

         The Company has had net losses in each period of its  operations  since
its inception, except for one quarter, and it had an accumulated deficit at June
30, 1998 of $129.4  million.  Net losses  applicable  to Common Stock were $14.3
million for the twelve  months ended  December 31, 1997,  $21.1  million for the
year ended  December 31, 1996, and $34.9 million for the year ended December 31,
1995. Included in those losses were non-recurring  charges.  See "Description of
Network Imaging - Business."

         The adverse  results of operations  that the Company has experienced is
expected  to  continue  at least  until the  latter  part of 1998.  The  Company
believes that the combination of existing cash, benefits from its second quarter
restructuring,  potential  future  proceeds  from such  additional  offerings of
equity  securities  as may be  required,  and any  anticipated  cash  flows from
operations, will provide sufficient resources to fund its activities through the
next twelve  months.  Any  anticipated  cash flows from  operations  are largely
dependent  upon the  Company's  ability  to achieve  its sales and gross  profit
objectives for its TREEV product  suite.  If the Company is unable to meet these
objectives,  it will consider  alternative  sources of  liquidity.  Although the
Company believes that it can  successfully  implement its operating plan and, if
necessary,   raise   additional   capital,   there  can  be  no  assurance  that
implementation of the plan will be successful or that financing, if sought, will
be available.

         The Company's stock is listed on Nasdaq,  and Nasdaq requires companies
to comply  with  certain  listing and  maintenance  requirements.  In 1997,  the
Company fell below the  requirement to maintain net tangible  assets of at least
$4.0 million. The Company appealed to a Nasdaq Listing Qualifications Panel, who

                                      -10-
<PAGE>

allowed the Company to continue to trade on Nasdaq but  required  the Company to
have a  minimum  of $6  million  in net  tangible  assets  to  ensure  long term
compliance  with the  requirement.  The Company  achieved net tangible assets in
excess of $6 million  at the end of 1997,  and the  Company  has since that time
maintained net tangible assets over $4 million.  The Company expects to continue
to  maintain  net  tangible  assets over $4  million;  however,  there can be no
assurances  that the Company will continue to do so. If the Company is unable to
meet the net tangible assets requirement,  it will consider additional offerings
of equity  securities and/or further  reductions of operating  expenses (such as
travel,  marketing,  consulting and salaries).  Although the Company believes it
can  successfully  implement  its  operating  plan  and,  if  necessary,   raise
additional  capital,  there can be no assurance that  implementation of the plan
will be successful or that financing, if sought, will be available.  Pursuant to
Nasdaq requirements,  common and preferred stock trading on Nasdaq must maintain
a minimum bid price of $1.00.  At times in 1997 and the first half of 1998,  the
Company's Common Stock has had a minimum bid price below $1.00.  Currently,  the
Company's  Common  Stock is trading  with a minimum bid price below  $1.00.  Any
inability to trade on Nasdaq could  adversely  impact the value of the Company's
stock. In order to maintain the Nasdaq  listing,  the Company may be required to
seek  shareholder  approval  to effect a reverse  stock split to bring the stock
price above $1.00.

         The computer  industry,  including  the  information  access,  document
management,  imaging and optical disk storage segments,  is highly  competitive,
and is characterized by rapid and continuous technological change, short product
cycles,  frequent product  innovations and new product  introductions,  evolving
industry standards,  and changes in customer  requirements and preferences.  The
Company's future  profitability  will depend on, among other things,  wide-scale
market  acceptance  of  the  Company's   products,   the  Company's  ability  to
demonstrate the potential advantages of its products over other types of similar
products  and  on  the  Company's   ability  to  develop  in  a  timely  fashion
enhancements  to existing  products or new products  that are  responsive to the
demands of the marketplace for information access, document management,  imaging
and optical disk  storage  systems.  There can be no assurance  that the Company
will be able to market  successfully  its current  products,  develop and market
enhancements to existing  products or introduce new products.  In addition,  the
Company faces existing competitors that are larger and more established and have
substantially greater resources than the Company. Because of the rapid expansion
of the information access, document management, imaging and optical disk storage
market,  the Company  will also face  competition  from new  entrants,  possibly
including  the  Company's  customers,  suppliers  or  resellers.   Technological
advances by any of the  Company's  current or future  competitors  could  render
obsolete or less  competitive  the products  being  offered by the Company.  The
Company believes that the principal competitive factors affecting the market for
information  access,  document  management,  imaging  and optical  disk  storage
products

                                      -11-
<PAGE>

include effectiveness,  scope of product offerings,  technical features, ease of
use, reliability,  customer service and support, name recognition,  distribution
resources and price. Current and potential competitors have established,  or may
establish  in the  future,  strategic  alliances  to increase  their  ability to
compete for the Company's  prospective  customers.  Accordingly,  it is possible
that new  competitors  or alliances may emerge and rapidly  acquire  significant
market  share.  Such  competition  could have a material  adverse  effect on the
Company's business, financial condition and results of operations.

         The Company's  development of enhancements to existing  products and of
new products is subject to the kinds of problems  and delays that are  routinely
encountered  in the  development  of  software.  For  example,  the  Company may
experience schedule overruns in software  development  triggered by factors such
as insufficient staffing or the unavailability of development-related  software,
hardware  or  technologies.  Further,  during the  development  of new  software
products,  or the enhancement of existing  products,  the Company's  development
schedules  may be  altered  as a  result  of the  discovery  of  software  bugs,
performance  problems  or changes to the  product  specification  in response to
customer requirements, market developments or Company initiated changes. Changes
in product  specifications  may delay completion of documentation,  packaging or
testing,  which may, in turn,  affect the release  schedule of the  product.  In
connection  with complex  software  products,  the  technology  market may shift
during the development cycle,  requiring the Company either to enhance or change
a product's  specifications  to meet a customer's  changing needs.  Any of these
factors  may cause a product  to enter the  market  behind  schedule,  which may
adversely affect market acceptance of the product, or place it at a disadvantage
to a  competitor's  product  that has  already  gained  market  share or  market
acceptance during the delay. The Company does not believe,  however,  that it is
practicable  to  quantify  the impact that such delays have had or in the future
may have on its operating  results.  There can be no assurance  that the Company
will  not  experience   difficulties  that  will  interrupt  the  marketing  and
distribution  of its current  products or that the Company  will not  experience
difficulties in the future that could materially delay or prevent the successful
development of other products.

Results of Operations - Six months ended June 30, 1998 and 1997

                   Revenues. Total revenues were $14.1 million and $18.4 million
for the six months ended June 30, 1998 and 1997, respectively.  The $4.3 million
decrease  in  revenue  was the  result of an  increase  in  product  revenue  of
$270,000,  or 3%, offset by a decrease in service  revenue of $4.6  million,  or
46%. The  increase in product  revenue was  attributable  to an increase of $2.7
million,  or 46%, in comparative  company  revenues offset by a decrease of $2.4
million due to the  disposition  in 1997 of the  Company's  subsidiary in France
("Dorotech").  The decrease in service sales of $4.6 million was the result of a
$5.5 million decrease due to the disposition of Dorotech,  offset by a $867,000,
or 19%,  increase in  comparative  company  revenues.  On a comparative  company
basis,  overall revenues increased $3.6 million,  or 34%, from $10.5 million for
the six months ended June 30, 1997 to $14.1 million for the same period in 1998.

                                      -12-
<PAGE>

                   Profit margins.  Profit margins for product sales increased 8
percentage  points for the first six months of 1998 over the same period in 1997
as cost of products  decreased from 50% to 42% of sales. The increase in product
sales  margins was  primarily  due to the  increased  sales mix of the Company's
internally  developed  software  products.  Profit  margins  for  service  sales
increased 8 percentage points for the six months ended June 30, 1998 as compared
to 1997 as the cost of services decreased from 77% to 69% of sales. The increase
in service  sales  margins  from 23% to 31% was due to the  Company's  continued
emphasis on its custom development and professional  services.  On a comparative
company basis,  overall profit margins  increased 7 percentage points to 47% for
the six months ended June 30, 1998 from 40% for the same period in 1997.

                   Sales and marketing.  Sales and marketing  expenses were $5.8
million or 41% of revenue,  for the six months  ended June 30, 1998  compared to
$7.3 million,  or 39% of revenue in 1997. The decrease of $1.4 million,  or 20%,
was the result of the  Company's  disposition  of Dorotech  during  1997,  which
reduced  sales and  marketing  expenses  $1.7  million,  offset  by an  $260,000
increase in comparative company expenses.

                   General and administrative. G&A expenses were $2.3 million or
16% of revenue, for the six months ended June 30, 1998 compared to $3.3 million,
or 18% of revenue in 1997. The decrease of $1.1 million,  or 32%, was the result
of the Company's disposition of Dorotech during 1997, which reduced G&A expenses
$754,000,  and a $296,000,  or 12%, decrease in comparative company G&A expenses
due to the Company's efforts in cost reduction.

                   Product development.  The Company's  expenditures on software
research  and  development  activities  ("R&D") in the six months ended June 30,
1998 were $2.7 million,  of which $0.7 million was  capitalized and $2.0 million
was expensed. Software research and development expenditures for the 1997 period
were $3.0 million,  of which $0.7 million was  capitalized  and $2.3 million was
expensed.  The $337,000  decrease in research and  development  expenditures  is
attributable  to the Company's 1997  disposition of Dorotech,  which reduced R&D
expenses  $589,000,  offset by a $252,000  increase in  comparative  company R&D
expenses.

                   Restructuring  costs.  During the second  quarter  1998,  the
Company  committed  to a plan of  restructuring  and  incurred  a charge of $1.5
million.

                   Gain on  extinguishement  of debt.  During the first  quarter
1997, the Company's  French  subsidiary,  Dorotech,  realized a $267,000 gain in
connection with the partial forgiveness of a grant made from a French government
agency.



                                      -13-
<PAGE>

                   Net loss.  The  Company's  net loss for the six months  ended
June 30, 1998 was $4.9  million as compared to $6.2  million for the  comparable
period of 1997.  The net loss  decrease of $1.3 million is due to a $1.0 million
decrease  in net  loss  from  the  Company's  continuing  operations,  which  is
primarily attributable to an increase of $2.5 million in gross margins offset by
the $1.5  restructuring  charge,  and due to the  disposition  of Dorotech which
reduced the net loss by $330,000.

                   Net loss applicable to Common Shares. The net loss applicable
to common  shares  includes  adjustments  for  dividend  amounts  related to the
Company's Series A preferred stock. The net loss applicable to common shares was
$5.6  million,  or ($.21) per share,  for the six months  ended June 30, 1998 as
compared to $8.1 million or ($.33) per share, for the comparable period of 1997.
The decrease in net loss  applicable  to common  shares is  attributable  to the
decrease in net loss  described  above and to the  decrease  in annual  Series A
Preferred Stock dividends from $2.00 to $0.84 per share.

Results of Operations - Three months ended June 30, 1998 and 1997

                   Revenues.  Total  revenues were $7.9 million and $9.3 million
for the  three  months  ended  June 30,  1998 and 1997,  respectively.  The $1.4
million  decrease in revenue was the result of an increase in product revenue of
$1.0 million,  or 24%,  offset by a decrease in service revenue of $2.4 million,
or 46%.  The  increase  in product  revenue  was  primarily  attributable  to an
increase of $2.3 million, or 85%, in comparative company product revenues offset
by a $1.3 million  reduction due the disposition in 1997 of the Company's French
subsidiary,  Dorotech.  The decrease in service revenues of $2.4 million was the
result of a $3.0 million decrease due to the disposition of Dorotech,  offset by
a $573,000,  or 25%,  increase in comparative  company  service  revenues.  On a
comparative company basis, overall revenues increased $2.9 million, or 58%, from
$5.0 million for the six months ended June 30, 1997 to $7.9 million for the same
period in 1998.

                   Profit margins. Profit margins for product sales increased 18
percentage  points in the second quarter of 1998 over the same period in 1997 as
cost of products  decreased  from 54% to 36% of sales.  The  increase in product
sales  margins was  primarily  due to the  increased  sales mix of the Company's
internally  developed  software  products.  Profit  margins  for  service  sales
increased  7  percentage  points for the three  months  ended  June 30,  1998 as
compared to 1997 as the cost of services decreased from 75% to 68% of sales. The
increase  in  service  sales  margins  from 25% to 32% was due to the  Company's
continuing  emphasis on its custom development and professional  services.  On a
comparative company basis, overall profit margins increased 14 percentage points
to 52% for the three  months ended June 30, 1998 from 38% for the same period in
1997.



                                      -14-
<PAGE>

                   Sales and marketing.  Sales and marketing  expenses were $3.1
million or 39% of revenue,  for the three months ended June 30, 1998 compared to
$3.6 million,  or 39% of revenue in 1997. The decrease of $537,000,  or 15%, was
the result of the Company's  disposition of Dorotech during 1997,  which reduced
sales  and  marketing  expenses  $840,000,  offset  by a  $303,000  increase  in
comparative company expenses.

                   General and administrative. G&A expenses were $1.1 million or
14% of  revenue,  for the three  months  ended June 30,  1998  compared  to $1.7
million,  or 18% of revenue in 1997.  The decrease of $614,000,  or 36%, was the
result of the Company's  disposition of Dorotech during 1997,  which reduced G&A
expenses $362,000,  and a $252,000,  or 19%, decrease in comparative company G&A
expenses due to the Company's efforts in cost reduction.

                   Product development.  The Company's  expenditures on software
R&D  activities  in the three months ended June 30, 1998 were $1.4  million,  of
which $0.4  million was  capitalized  and $1.0  million was  expensed.  Software
research and development  expenditures for the 1997 period were $1.6 million, of
which $0.3  million was  capitalized  and $1.3  million was  expensed.  The $0.2
million   decrease  in  research  and  development   expenditures  is  primarily
attributable to the Company's 1997 disposition of Dorotech.

                   Restructuring  costs.  During the second  quarter  1998,  the
Company  committed  to a plan of  restructuring  and  incurred  a charge of $1.5
million.

                   Net loss.  The  Company's net loss for the three months ended
June 30, 1998 was $2.5  million as compared to $3.5  million for the  comparable
period of 1997.  The net loss decrease of $1.0 million in the second  quarter of
1998 as compared to the same period in 1997 is due to a $900,000 decrease in net
loss from the Company's continuing  operations,  which is primarily attributable
to an increase of $2.4 million in gross margins offset by the $1.5 restructuring
charge, and the disposition of Dorotech, which reduced the net loss by $100,000.

                   Net loss applicable to Common Shares. The net loss applicable
to common  shares  includes  adjustments  for  dividend  amounts  related to the
Company's Series A preferred stock. The net loss applicable to common shares was
$2.8 million,  or ($.10) per share,  for the three months ended June 30, 1998 as
compared to $4.4 million or ($.18) per share, for the comparable period of 1997.
The decrease in net loss  applicable  to common  shares is  attributable  to the
decrease in net loss  described  above and to the  decrease  in annual  Series A
Preferred Stock dividends from $2.00 to $0.84 per share.





                                      -15-
<PAGE>

Liquidity and Capital Resources

      As of June  30,  1998,  the  Company  had  $4.1  million  in cash and cash
equivalents,  as  compared  to $3.8  million  in cash  and cash  equivalents  at
December  31,  1997.  Net working  capital was $2.0 million at June 30, 1998 and
$10.0 million at December 31, 1997.

        For the six months  ended June 30, 1998,  the $276,000  increase in cash
and cash  equivalents  resulted from $6.0 million in cash generated by investing
activities,  offset  by  $784,000  used to fund  operating  activities  and $4.9
million in cash used to fund financing activities.

        The $6.0 million  provided by investing  activities arose primarily with
respect to cash collected from the promissory note received as consideration for
the sale of Dorotech.  The $784,000 used by operating activities arose primarily
with  respect  to the $4.9  million  net loss in  operations,  offset  by a $1.2
million in depreciation  charges,  $1.5 million in restructuring  costs and $1.3
million  increase  in  deferred  revenues.  The  $4.9  million  in cash  used by
financing  activities  arose  primarily from the $6.5 million  redemption of the
Company's  Series F Preferred  Stock,  $1.3 million used to redeem the Company's
convertible debentures and payments in capital leases of $521,000, offset by the
$3.4 million proceeds from the issuance of common stock.

         The adverse  results of operations  that the Company has experienced is
expected  to  continue  at least  until the  latter  part of 1998.  The  Company
believes that the combination of existing cash, benefits from its second quarter
restructuring,  potential  future  proceeds  from such  additional  offerings of
equity  securities  as may be  required,  and any  anticipated  cash  flows from
operations, will provide sufficient resources to fund its activities through the
next twelve  months.  Any  anticipated  cash flows from  operations  are largely
dependent  upon the  Company's  ability  to achieve  its sales and gross  profit
objectives for its TREEV product  suite.  If the Company is unable to meet these
objectives,  it will consider  alternative  sources of  liquidity.  Although the
Company believes that it can  successfully  implement its operating plan and, if
necessary,   raise   additional   capital,   there  can  be  no  assurance  that
implementation of the plan will be successful or that financing, if sought, will
be available.



                                      -16-
<PAGE>


PART II. OTHER INFORMATION

Item 1.              Legal Proceedings

         The Company is not  involved in any legal  proceedings,  other than the
routine litigation incidental to the business.

Item 2.           Changes in Securities

             In June 1998,  the Company  converted the remaining $1.0 million of
the Stockholder  line of credit into equity through the issuance of 1,000 shares
of Series M1  Convertible  Stock  ("Series M1 Stock") held by an investor of the
Company.  The Company  agreed to file a  registration  statement to register the
Common Stock issuable upon  conversion of the preferred stock on or about August
1, 1998. The Company received no proceeds from the conversion of the Stockholder
line of credit to equity. The Series M1 Stock issued and outstanding in December
2001  automatically  converts  into Common  Stock.  At June 30, 1998,  the 1,000
shares of Series  M1 Stock  were  convertible  into  1,230,769  shares of Common
Stock.

             During the first quarter of 1998,  the Company  completed a private
placement  of  1,108,947  shares of Common  Stock,  together  with  warrants  to
purchase an additional  50,000 shares of Common Stock,  pursuant to Regulation D
under the Securities Act of 1933, as amended (the  "Securities  Act") to a group
of seven  investors.  Proceeds  from the offering were $1.1 million and offering
costs were $26,000.  Pursuant to the terms of the private placement, the Company
is obligated to file a  registration  statement with the Securities and Exchange
Commission to register the shares by August 31, 1998.

                                      -17-
<PAGE>

              During the second quarter of 1998, the Company completed a private
placement of 2,907,126  shares of Common  Stock,  pursuant to Regulation D under
the  Securities  Act to a group of three  investors.  Proceeds from the offering
were $2.5 million and offering costs were $150,000. Pursuant to the terms of the
private  placement,  the Company is obligated to file a  registration  statement
with the Securities and Exchange Commission to register the shares by August 31,
1998.

              During the second  quarter of 1998,  the  Company  issued  342,384
shares  of Common  Stock as a  quarterly  dividend  to the  shareholders  of the
Company's Series A Preferred Stock

Item 3.           Changes Upon Senior Securities

                  None.

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

         The Company held its Annual Meeting of Stockholders on June 11, 1998 at
which the Stockholders elected five directors, ratified the selection of Ernst &
Young LLP as the Company's  independent  accountants  for the fiscal year ending
1998,  approved the adoption of the 1997 Director Stock Option Plan, approved an
increase  to the  number  of  shares  which  may be  granted  under the 1994 Key
Incentive  Stock  Option  Plan,  and  approved  the  issuance  of  shares of the
Company's  Common Stock  issuable in  connection  with the Series L  Convertible
Preferred  Stock, on exercise of warrants to purchase shares of Common Stock for
$1.00 under Nasdaq Rule 4460(i)(1)(D).

         The  following  table sets forth the names of the nominees for director
and the votes for and withheld with respect to each such nominee:

Nominee                                  For               Authority Withheld
-------                               ----------           ------------------
Robert P. Bernardi....................24,343,678                  624,768
John F. Burton........................24,343,678                  624,768
James J. Leto.........................24,343,678                  624,768
C. Alan Peyser........................24,343,678                  624,768
Robert Ripp...........................24,343,678                  624,768

         In connection  with the  ratification of the selection of Ernst & Young
LLP as the independent auditors for the Company for the fiscal year ending 1998,
24,369,788 shares were voted in favor of the ratification and 598,658 abstained.

         With respect to the proposal to approve the adoption of the 1997 Direc-
tor Stock Option Plan, 24,403,088 shares were voted for the proposal and 565,358
were Broker non-votes.

                                      -18-
<PAGE>

         With  respect to the  proposal  to approve an increase to the number of
shares  which  may  granted  under the 1994 Key  Incentive  Stock  Option  Plan,
23,215,519  shares  were  voted  for the  proposal  and  1,752,927  were  Broker
non-votes.

         In  connection  with the  approval  of the  issuance  of  shares of the
Company's  Common Stock  issuable in  connection  with the Series L  Convertible
Preferred  Stock, on exercise of warrants to purchase shares of Common Stock for
$1.00 under  Nasdaq  Rule  4460(i)(1)(D),  24,398,288  shares were voted for the
proposal and 570,158 were Broker non-votes.

Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits.

3.14  Certificate of Ownership and Merger Merging TREEV, Inc. into Network Imag-
ing Corporation filed in Delaware on May 5, 1998.

3.15  Certificate  of   Designations,   Preferences  and  Rights  of  Series  M1
convertible  Preferred  Stock filed with the  Secretary of State of the State of
Delaware on July 22, 1998.

10.34 Securities Purchase Agreement  between TREEV, Inc. and Fred Kassner  as of
June 30, 1998.

27.1  Financial data schedule

(b)   Reports on Form 8-K.

Form 8-K filed on June 1, 1998 to report certain  organizational  changes in the
Company aimed at saving $4,800,000 annually.












                                      -19-




<PAGE>



                                   SIGNATURES

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


                                                  TREEV, INC.
                                                 (Registrant)


Date:  July 23, 1998                         By /s/ James Leto
                                                --------------
                                                James J. Leto
                                                Chief Executive Officer


Date:  July 23, 1998                         By /s/ David MacWhorter
                                                --------------------
                                                David E. MacWhorter
                                                President and Chief Operating
                                                Officer


Date:  July 23, 1998                         By /s/ Jorge R. Forgues
                                                --------------------
                                                Jorge R. Forgues
                                                Senior Vice President of Finance
                                                and Administration, Chief Finan-
                                                cial Officer and Treasurer