FORM 10-Q
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                   QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
                     of the Securities Exchange Act of 1934


For Quarter ended October 31, 1998
Commission file number 0-8006

                             COX TECHNOLOGIES, INC.
                            FKA: Energy Reserve, Inc.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


          ARIZONA                                                86-0220617
-------------------------------                              -------------------
(State or other jurisdiction of                                 (IRS Employer
incorporation or organization)                               Identification No.)

               69 McAdenville Road, Belmont, North Carolina 28912
               --------------------------------------------------

       Registrant's telephone number, including area code (704) 825-8146

               Former name, former address and former fiscal year,
                          if changed since last report

Indicated  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 [ ]

                       APPLICABLE ONLY TO ISSUERS INVOLVED
                        IN BANKRUPTCY PROCEEDINGS DURING
                            THE PRECEDING FIVE YEARS:

Indicated  by check mark  whether the  registrant  has filed all  documents  and
reports  required  to by filed by  Sections  12,  13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court.
                                                                 Yes [ ]  No [ ]

                       APPLICABLE ONLY TO CORPORATE USERS:

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

Class - Common Stock, without Par Value
23,280,922 Shares Outstanding at December 31, 1998
<PAGE>
                     COX TECHNOLOGIES, INC. AND SUBSIDIARIES
                                      INDEX



                                                                        PAGE
                                                                        ----
FACE SHEET                                                                1

INDEX                                                                     2

PART I. - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS 3

     Consolidated Balance Sheets at
         October 31, 1998 and July 31, 1998                               4

     Consolidated Statements of
         Operations and Accumulated Deficit
         Three Months Ended October 31, 1998 & 1997                       5

         Six Months Ended October 31, 1998 & 1997                         6

     Statement of Cash Flows Six Months Ended
         October 31, 1998 and 1997                                        7
     Notes to Consolidated Financial Statements                           8

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
        OF FINANCIAL CONDITION AND RESULTS OF
        OPERATIONS                                                     9-13

PART II. - OTHER INFORMATION AND SIGNATURE                            13-14

                                        2
<PAGE>
                                                                       FINANCIAL
                                                                     INFORMATION

                     COX TECHNOLOGIES, INC. AND SUBSIDIARIES

PART I  - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

Cox Technologies,  Inc. and its subsidiaries,  Twin Chart,  Inc., its subsidiary
Transit Services,  Inc., Vitsab, AB, Sweden,  Vitsab,  USA, Inc., Energy Reserve
Holdings,  Inc.,  and Energy Reserve  Financial  Corporation  (collectively  the
Company),   engage  in  the  business  of  producing  and  distributing  transit
temperature  recording  instruments,  both  domestically  in United  States  and
internationally.  The  Company  also  engages  in  the  business  of  acquiring,
developing and selling oil properties and of producing and selling crude oil for
its own  account  in United  States.  As such the  Company  has not and does not
engage in petroleum refining or retail marketing.

The Consolidated  Financial Statements included herein have been prepared by the
Company,  without audit, pursuant to the rules and regulations of the Securities
and Exchange  Commission.  Certain information and footnote disclosures normally
included in financial  statements prepared in accordance with generally accepted
accounting  principles have been condensed or omitted pursuant to such rules and
regulations,  although the Company believes that the disclosures are adequate to
make the  information  presented  not  misleading.  It is  suggested  that these
condensed  financial  statements  be  read in  conjunction  with  the  financial
statements  and data notes thereto  included in the  Company's  annual report on
Form 10-K, for the year ended April 30, 1998

In the opinion of the Company,  all  adjustments  have been  included  which are
necessary for the  preparation of the balance sheets of Cox  Technologies,  Inc.
and  consolidated  subsidiaries  at October 31, 1998 and April 30, 1998 and to a
fair  statement of the results of operations  for the three months ended October
31, 1998 and 1997 and for the six months ended October 31, 1998 and 1997.

                                        3
<PAGE>
COX TECHNOLOGIES, INC., AND SUBSIDIARIES
(FORMERLY ENERGY RESERVE, INC. AND SUBSIDIARIES)
CONSOLIDATED BALANCE SHEETS
OCTOBER 31, 1998 AND APRIL 30, 1998
                                                    October 31,      April 30,
                                                       1998            1998
                                                       ----            ----
ASSETS
CURRENTS ASSETS:
  Cash and cash equivalents (Note A)               $  1,776,733    $  2,575,946
  Accounts receivable, less allowance for
    doubtful accounts of $29,527 at
    October 31, 1992 and April 30, 1998               1,889,262       1,627,074
  Inventory (Note B)                                  1,385,990       1,043,531
  Investment in securities                               62,100          39,500
  Notes receivable-current portion                       17,862          33,503
  Prepaid expenses                                       87,401         352,143
  Deferred income taxes (Note C)                            -0-          30,000
                                                   ------------    ------------
     TOTAL CURRENT ASSETS                             5,219,348       5,701,696

  Property and equipment (net)                        6,413,277       3,704,243
  Investments in securities                                 -0-         300,000
  Deposits                                                3,097           5,290
  Goodwill (Note A)                                     847,663          48,479
  Notes receivable - non-current portion                 29,562       ____6,828
                                                   ------------    ------------

TOTAL ASSESTS                                      $ 12,512,947    $  9,766,536
                                                   ============    ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable and accrued expenses            $    363,264         356,811
  Income taxes payable (Note C)                          26,702          52,270
  Current portion of long-term debt (Note A)          1,246,720         510,369
                                                   ------------    ------------
     TOTAL CURRENT LIABILITIES                        1,636,686    $    919,450

  Long-term debt                                        856,511         280,706
  Minority Interest                                         -0-             669
                                                   ------------    ------------
TOTAL LIABILIATIES                                 $  2,493,197    $  1,200,825
                                                   ------------    ------------
COMMITMENTS AND CONTINGENCIES (Note D)

STOCKHOLDERS' EQUITY
  Common stock, no par value: authorized
   100,000,000 shares; issued and outstanding
   19,905, 188 shares at October 31, 1998
   and at April 30, 1998 (Note A)                    20,885,495      20,041,562
  Common stock subscribed                                58,100          58,100
  Contributed Capital                                   220,872         220,872
  Treasury stock                                        (45,920)        (45,920)
  Accumulated deficit                               (10,169,113)    (10,598,719)
  Unrealized loss on available-for-sale securities          -0-        (180,500)
  Less - notes receivable for common stock:
  Issued                                               (875,650)       (875,650)
  Subscribed                                            (54,034)        (54,034)
                                                   ------------    ------------
TOTAL STOCKHOLDERS' EQUITY                           10,019,750       8,565,711
                                                   ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY         $ 12,512,947    $  9,766,536
                                                   ============    ============

                       SEE NOTES TO FINANCIAL STATEMENTS

                                       4
<PAGE>
                     COX TECHNOLOGIES, INC. AND SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT


                                                 Three Months Ended October 31
                                                 ------------------------------
                                                     1998               1997
                                                     ----               ----
REVENUE
   Sales                                         $  2,248,525      $  2,086,957
                                                 ------------      ------------
COSTS AND EXPENSES
   Cost of sales                                    1,129,310           986,501
   General and administrative expenses                585,226           430,889
   Sales expense                                      337,366           344,509
   Interest expense                                    35,796            16,618
   Depreciation and depletion                          50,230            11,817
                                                 ------------      ------------
   TOTAL EXPENSE                                    2,137,928         1,790,334
                                                 ------------      ------------

          INCOME FROM OPERATIONS                      110,597           296,623

OTHER INCOME (expense)
   Other income (expense)                             186,640            14,776
                                                 ------------      ------------
   Earnings before income taxes                       297,237           311,399

   Provisions for income taxes (note B)                40,900            12,011
                                                 ------------      ------------
NET EARNINGS                                          256,337           299,388

ACCUMULATED DEFICIT, beginning of period          (10,425,450)      (13,379,020)
                                                 ------------      ------------
ACCUMULATED DEFICIT, end of period               $(10,169,113)     $(13,079,632)
                                                 ============      ============
EARNINGS PER SHARE:
   Net earnings (loss)                           $       0.01      $       0.01
                                                 ============      ============

                        SEE NOTES TO FINANCIAL STATEMENTS

                                        5
<PAGE>
                     COX TECHNOLOGIES, INC. AND SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT


                                                  Six Months Ended October 31,
                                                 ------------------------------
                                                     1998              1997
                                                     ----              ----
REVENUE
 Sales                                           $  4,621,388      $  4,244,312
                                                 ------------      ------------

COSTS AND EXPENSES
 Cost of sales                                      2,307,536         1,992,506
 General and administrative expenses                1,186,452           944,961
 Sales expense                                        710,113           625,087
 Interest expense                                      77,520            34,906
 Depreciation and depletion                            75,322           _22,048
                                                 ------------      ------------
 TOTAL EXPENSE                                      4,356,943         3,619,508
                                                 ------------      ------------

      INCOME FROM OPERATIONS                          264,445           624,804

OTHER INCOME (EXPENSE)
 Other income (expense)                               206,061              (748)
                                                 ------------      ------------

 Earnings before income taxes                         470,506           624,056

 Provisions for income taxes (note B)                  40,900            38,401
                                                 ------------      ------------

NET EARNINGS                                          429,606           585,655

ACCUMULATED DEFICIT, beginning of period          (10,598,719)      (13,665,287)
                                                 ------------      ------------
ACCUMULATED DEFICIT, end of period               $(10,169,113)     $(13,079,632)
                                                 ============      ============
EARNINGS PER SHARE:
 Net earnings (loss)                             $       0.02      $       0.03
                                                 ============      ============

                        SEE NOTES TO FINANCIAL STATEMENTS

                                        6
<PAGE>
                     COX TECHNOLOGIES, INC. AND SUBSIDIARIES
                             STATEMENT OF CASH FLOWS

                                                    Six Months Ended October 31,
                                                    ----------------------------
                                                         1998           1997
                                                         ----           ----
CASH FLOW FROM OPERATING ACTIVITIES
  Net earnings                                       $   429,606    $   585,655
  Adjustments to reconcile net earnings
  to net cash used by operating activities:
  Depreciation and depletion                              75,322         22,048
  Loss on securities                                     180,500            -0-

CHANGES IN CURRENT ASSETS AND CURRENT LIABILITIES
(Increase) decrease in current assets:
  Accounts receivable                                   (262,188)       (20,576)
  Inventory                                             (342,459)        30,502
  Prepaid expenses                                       264,742       (188,641)
  Notes receivable and investments                        (6,959)       330,648

(Increase) decrease in non-current assets
  Deposits                                                 2,193            -0-
  Deferred taxes                                          30,000            -0-
  Notes receivable - long term                           (22,734)           -0-
  Goodwill                                              (803,184)        27,973
Increase (decrease) in current liabilities:
  Accounts payable and accrued expenses                    6,453         50,114
  Income Taxes Payable                                   (25,568)       (37,246)
                                                     -----------    -----------
NET CASH PROVIDED (used) BY OPERATING ACTIVITIES        (474,276)        38,953
                                                     -----------    -----------
CASH FLOW FROM INVESTING ACTIVITIES
  Investment in securities                               300,000            -0-
  Issuance of common stock                               843,933            -0-
  Property and equipment-net disposal                 (2,780,356)        40,918
  Minority interest                                         (669)         2,674
                                                     -----------    -----------
NET CASH PROVIDED (used)BY INVESTING ACTIVITIES       (1,637,092)        43,592
                                                     -----------    -----------
CASH FLOW FROM FINANCING ACTIVITIES
  Repayment on notes payable                            (437,844)       (86,104)
  Borrowing under notes payable                        1,750,000            -0-
                                                     -----------    -----------

NET CASH FROM INVESTING ACTIVITIES                     1,312,156        (86,104)
                                                     -----------    -----------

NET INCREASE (DECREASE) IN CASH                         (799,212)        (3,559)

CASH, beginning of year                                2,575,945      1,118,019
                                                     -----------    -----------

CASH, end of year                                    $ 1,776,733    $ 1,114,460
                                                     ===========    ===========

                        SEE NOTES TO FINANCIAL STATEMENTS

                                        7
<PAGE>
COX TECHNOLOGIES, INC AND SUBSIDIARIES
(FORMERLY ENERGY RESERVE, INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
QUARTER ENDED OCTOBER 31, 1998

NOTE A - CASH, NOTES PAYABLE AND COMMON STOCK

In June 1998, the Company acquired Vitsab, AB, a Swedish corporation in exchange
for  3,375,734  shares of the  Company's  unregistered  common  stock  valued at
$843,933  or $0.25 per share and 950,000  shares of the common  stock of VITSAB,
USA,  Inc., a previously  wholly-owned  subsidiary of the Company with 4,750,000
issued shares of common stock  outstanding and the assumption of certain debt in
the amount of $2,300,000 owed by VITSAB, AB to an unrelated company. The Company
borrowed  $1,750,000  from a bank under two notes and  security  agreements  and
liquidated the referenced $2,300,000 debt for the discounted sum of $1,750,000.

The Company has pledged a  $1,000.000  certificate  of deposit  with the lending
bank as collateral for the $1,750,000  borrowed funds. The loans are all due and
payable  within  one year  from  June  1998.  Under  the  terms of the notes and
security  agreements  the  Company is  obligated  to make  eleven  (11)  monthly
payments of $19,258.01  and one (1) final payment of all  outstanding  principal
and accrued interest due June 17, 1999.

NOTE B - INVENTORY

Inventory at October 31, 1998 and April 30, 1998 consists of the following:


                                                    1998
                                        -----------------------------
                                        October 31,         April 30,
                                        -----------         ---------

       Raw materials                    $  605,998         $  364,540
       Work-in-progress                    346,648            352,096
       Finished goods                      430,888            324,439

       Crude oil                             2,456              2,456
                                        ----------         ----------

                                        $1,385,990         $1,043,531
                                        ==========         ==========

NOTE C- INCOME TAXES

The Company and its subsidiaries  file  consolidated  Federal income tax returns
and separate State income tax returns.

NOTE D - COMMITMENTS AND CONTINGENCIES

There have been no changes in the disclosures of commitments,  contingencies and
litigation  as contained in the  Company's  annual report Form 10-K for the year
ended April 30, 1998.

                                       8
<PAGE>
                                                                       FINANCIAL
                                                                     INFORMATION


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

LIQUIDITY AND CAPITAL RESOURCES

At October 31, 1998 the Company  had a working  capital of  $3,582,662.  This is
decrease  of  $1,199,584  for the six months  period May 1, 1998 to October  31,
1998.  This was  primarily  due to the debt of  $1,750,000  incurred  to acquire
Visual Indicator Systems, AB of Sweden (Vitsab, AB) in June 1998.

The  Company  did not incur any  long-term  debt  during  this  period,  however
investment in property and equipment increased  significantly by the acquisition
of Vitsab,  AB. At present,  cash flow from  operations  is adequate to meet the
cash requirements and commitments of the Company.  However, the Company plans to
enter  into  equity,  debt or other  financing  arrangements  to meet its future
financial needs for expansion and:

      (a)   To provide for general working capital needs including the servicing
            of the Vitsab, AB acquisition debt and operations

      (b)   To repay outstanding liabilities


COMPARISON OF OPERATIONS FOR SECOND FISCAL QUARTER ENDED OCTOBER 31, 1998
AND 1997

Net earnings for the second fiscal  quarter ended October 31, 1998 were $256,337
which is a decrease  of $43,051  from the  $299,388  net  earnings  for the same
period of 1997.  Earnings from operations for 1998 were $110,597,  a decrease of
$186,026 from the 1997 second fiscal quarter earnings from operations.

                                        9
<PAGE>
COMPARISON OF OPERATIONS FOR SECOND QUARTER (CONTINUED)

The following  schedule  reflects the operations of the two industry segments of
the Company for the three months ended October 31, 1998 and 1997.

                                         Three Months Ended October 31,
                              --------------------------------------------------
                                         1998                         1997
                              -----------------------   ------------------------
                              Temperature     Oil        Temperature     Oil
                               Recorders   Production     Recorders   Production
                               ---------   ----------     ---------   ----------

Sales                         $2,248,525    $    -0-     $2,083,397    $  3,560

Cost of sales                  1,126,863       2,447        985,858         643
General & Administrative         539,233      36,136        403,735      27,154
Sales expense                    337,366         -0-        344,509         -0-
Interest                          45,653         -0-          8,360       8,258
Depreciation/Amortization         50,230         -0-         10,283         994
                              ----------    --------     ----------    --------

Income (loss) from operations    149,180     (38,583)       330,112     (33,489)
Other Income (expense)           (36,321)    222,961         14,776         -0-
                              ----------    --------     ----------    --------
Earnings (loss) -
   Before income taxes           112,859     184,378        344,888     (33,489)
Income taxes                      27,134      13,766         12,011         -0-
                              ----------    --------     ----------    --------
Net earnings (loss)           $   85,725    $170,612     $  332,877    $(33,489)
                              ==========    ========     ==========    ========

TEMPERATURE RECORDERS OPERATIONS

Sales  increased  $165,128 or 8% in 1998 as compared to the second  quarter 1997
operations. Cost of sales was 50.1% for 1998 as compared to 47.3% for 1997. This
was primarily due to costs of the new visual tag indicator  operations.  General
and  Administrative  expense increased  $135,498 or 6.5% in 1998 over 1997. This
increase was due primarily to R & D expenses  pertaining  to new  products.  The
increase  in  interest  expense  for  1998 as  compared  to 1997  resulted  from
indebtedness  incurred  in the  acquisition  of  Vitsab,  AB.  The  increase  in
depreciation  and  amortization  of $39,947 was due to the visual tag  indicator
operations.  Other  expense  for 1998 was due to a one-time  royalty  expense of
$48,000 pertaining to new product development.

OIL PRODUCTION OPERATIONS

Loss from operations  increased  slightly by $5,094 in 1998 as compared to 1997.
This was  primarily  due to general  and  administrative  expense  increases  in
professional  fees and  salaries.

Other  income  of  $222,961  in  1998  was  realized  from  the   settlement  of
indebtedness at less than the recorded liability.

Net earnings increased $204,101 in 1998 over the net loss of $33,489 in 1997.

                                       10
<PAGE>
COMPARISON OF OPERATIONS FOR SIX MONTHS ENDED OCTOBER 31, 1998 AND 1997

There was a  consolidated  net earnings of $429,606 for the period ended October
31,  1998,  as compared to a net  earnings of $585,655 for the same period ended
October 31,  1997.  To afford  better  analysis  and  comparison  of the similar
periods of 1998 and 1997,  the following  schedule  segregates the operations by
industry segments of the oil production  operations and the temperature recorder
operations.

<TABLE>
<CAPTION>
INDUSTRY SEGMENT                  Oil Production   Temp.Record   Oil Production  Temp Record
                                  --------------   -----------   --------------  -----------
                                      May 1-          May 1-         May 1-         May 1-
PERIOD                            Oct. 31, 1998   Oct. 31, 1998   Oct. 31,1997   Oct. 31,1997
                                  -------------   -------------   ------------   ------------
<S>                                <C>            <C>             <C>           <C>
REVENUE:
 Sales                              $    -0-        $4,621,388      $  17,734     $4,226,578
COST AND EXPENSES:
 Cost of sales                         3,286         2,304,250          7,893      1,984,613
 General & administrative expenses    67,199         1,119,253         62,465        882,496
 Sales expense                           -0-           710,113            -0-        625,087
 Interest expense                      9,857            67,663         16,516         18,390
 Depreciation & depletion                -0-            75,322          1,988         20,060
                                    --------        ----------      ---------     ----------

INCOME (LOSS) FROM OPERATIONS        (80,342)          344,787        (71,128)       695,932

OTHER INCOME (expense):              238,704           (32,643)       (31,919)        31,171
                                    --------        ----------      ---------     ----------
Earnings (loss) before income
 taxes                               158,362           312,144       (103,047)       727,103
Provisions for income taxes           13,766            27,134          1,155         37,246
                                    --------        ----------      ---------     ----------

NET EARNINGS (LOSS)                 $144,596        $  285,010      $(104,202)    $  689,857
                                    ========        ==========      =========     ==========
</TABLE>

TEMPERATURE RECORDER OPERATIONS

Net earnings  decreased $404,847 for the six months of 1998 as compared to 1997.
The decrease was primarily due to the visual indicator tag operations  including
R & D expenses.

Sales increased $394,810 or 8% in 1998 over the 1997 period.  Cost of sales as a
percent  of sales was 24.2% for 1998 and  20.8% for 1997.  Sales  expense,  as a
percent of sales was 15.4% for 1998 and 14.4% for 1997.  Interest,  depreciation
and depletion  were 31.1% of sales for 1998 and 1.0% for 1997. In the aggregate,
the  percentage  increases in all categories of costs and expenses for 1998 over
1997  amounted to 9.5%of sales or $439,031.  This  increase was primarily due to
visual indicator tag and other new product development costs and expenses.

Other  expense  of $32,643  for 1998 was due  primarily  to a  one-time  royalty
expense of $48,000  pertaining  to new  product  development  as  compared  to a
$31,171 other income in 1997 from interest earnings.

                                       11
<PAGE>
COMPARISON OF OPERATIONS FOR SIX MONTHS ENDED OCTOBER 31, 1998 AND 1997
(CONTINUED)

OIL PRODUCTION OPERATIONS

There was a decrease of $17,734 in crude oil sales for 1998 as compared to 1997.
This was the result of restricted  production  due to declining oil prices.  The
Company has now restored  production  and the last six months of the fiscal year
should show marked improvement. The loss from operations increased by $9,214 for
1998 over 1997.  Other income of $238,704 for 1998 was  primarily  due to income
realized  from  the  settlement  of  indebtedness  at  less  than  the  recorded
liability.  Overall net earnings improved by $248,798 for 1998 over the net loss
of $104,202 for 1997.

YEAR 2000 DISCLOSURE

1. COMPANY'S STATE OF READINESS

Management  began  addressing the Company's Year 2000 issues over two years ago,
at which  time it was  determined  the  accounting  software  was not Year  2000
compliant.  New software was purchased  and  installed.  The Company  obtained a
written  statement  from the  software  vendor  who  attested  to the Year  2000
readiness of this software. To accommodate this new software the Company updated
its network software with Novell 4.0 to interact with the accounting software in
a manner that will not interfere  with its Year 2000  readiness.  Management has
also reviewed all  electronically  based product software  programs sourced from
third party vendors and have determined that they are all Year 2000 compliant.

The  Company  has  mailed  questionnaire  forms  to  all  its  mission  critical
vendor/suppliers  of parts for its assembly line. There has been a 90% return of
these informational requests.  Concurrently, the Company is qualifying alternate
vendor/suppliers  for  potential   replacement  for  any  non-responsive  and/or
non-compliant  vendors.   Management  expects  the  process  of  obtaining  100%
assurance  of present  vendors  compliance  or  alternate  Year 2000  compliance
vendors to be completed by June 1999.

2. COSTS TO ADDRESS THE COMPANY'S YEAR 2000 ISSUES

The Company has expended  approximately  $15,000 to date in addressing  its Year
2000  readiness.  By management  analysis,  the future outlay for addressing any
perceived Year 2000 issues will not exceed $25,000 including assembly line parts
and supplies under its contingency plan.

3. RISKS OF THE COMPANY'S YEAR 2000 ISSUES

Management's analysis of its Year 2000 readiness indicate that there are no Year
2000  issues  that  will have a  material  effect on its  business,  results  of
operations or financial condition.

This opinion is based upon the fact that the Company's  accounting  readiness is
now  complete  and all of the  vendors  of parts and  supplies  critical  to its
operations have acknowledged Year 2000 readiness and compliance

                                       12
<PAGE>
4. COMPANY'S CONTINGENCY PLANS

If management's analysis of its third party vendor capability is not achieved by
the June 1999 date, a contingency  plan has been  developed  which  provides for
stockpiling of assembly line parts and  continuing  new vendor  sourcing of Year
2000 compliance vendors.


PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Reference  is made to the annual  report  Form 10-K of the  Company for the year
ended April 30, 1998,  relative to legal proceedings and litigation.  No charges
or determinations  have occurred on such proceedings  during the quarter covered
by this report.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

        (a)     Exhibit 27 - Financial Data Schedule

        (b)     There were no Form 8-K's filed by the Company during the quarter
                ended October 31, 1998.

                                       13
<PAGE>

SIGNATURES

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


                                       COX TECHNOLOGIES, INC


Date January __, 1999                  /s/ James L Cox
                                       -----------------------------------------
                                       James L Cox, President and Chairman





Date January __, 1999                  /s/ Robert W. Dupree
                                       -----------------------------------------
                                       Robert W. Dupree, Chief Financial Officer



                                       14